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The Future of Tesla

Everybody knows Tesla as one of the top electric vehicle automakers in the market today. Furthermore, the company seems financially healthy and profitable:


 

Chart Source: Investing.com

 

However, what does the future reserve in terms of auto market and stock value?

Other automakers are entering the market and will force prices down, reducing Tesla's profit margins. Current energy supply problems in Europe will have negative effects in the output and profitability of Tesla's factory in Germany (Gigafactory Berlin-Brandenburg). China's lockdowns are having negative effects (Source: Fortune) in the productivity of Tesla Giga Shanghai (Gigafactory 3). The delivery of new vehicles is slowing (Source: Reuters). The economy will enter (officially) in some sort of recession in the second half of 2022. Thus, we can only expect car sales will decrease (2022-2023). Furthermore, Tesla vehicles are on the expensive side, which might contract sales even more.

Since November 2021, Tesla's stock (TSLA) price fell from ~1230 USD to ~720 USD, a decrease of ~42 %. However, in terms of stock valuation, it is still astronomical with a P/E (share price/earnings) ratio of ~97.7.

Chart Source: Investing.com


Forecast:

Tesla is expected to release Q2 (second quarter) earnings on 2022-07-20 after market close. The numbers will be mostly solid, but some yellow/red flags might appear, scaring investors are preparing them for the recession in the next quarters, which will decrease EPS (earnings per share). This might be an opportunity for the stock value to fall even more during the second half of the year. Major resistance levels might be at 550 USD and 450 USD. This is not investment advice, it is solely a personal forecast based on technical analysis and macroeconomic conditions.


Take care, invest wisely,

JKO News.

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