Sign InSummary
On July 11, 2024, Tesla, Inc. (TSLA) stock tumbled by 8.44% to $241.03, driven by delays in the robotaxi project, with technical indicators suggesting further potential downside and fundamental analysis highlighting overvaluation concerns amidst mixed analyst sentiment.
Technical Analysis
Tesla, Inc. (TSLA) experienced a significant drop in its stock price on July 11, 2024, closing at $241.03, down $22.23 (8.44%) from the previous session. This sharp decline was triggered by the announcement of delays in the highly anticipated robotaxi project. The intraday low and high for the stock were $239.65 and $271, respectively.
The Relative Strength Index (RSI) sits at 78, indicating overbought conditions, which suggests a potential for more downside. The stock is trading well above its 50-day moving average ($189.12) and 200-day moving average ($205.46). The Moving Average Convergence Divergence (MACD) is significantly positive at 15.08, signaling strong upward momentum that is now being tested by recent news.
In terms of support and resistance, the closest support level is at $231.26, while immediate resistance is at $246.39. Given the recent volatility, the Average True Range (ATR) is 4.85, reflecting high market sensitivity.
Fundamental Analysis
On the fundamental side, Tesla is valued with a market capitalization of $768.69 billion, a P/E ratio of 61.49, and an EPS of $3.92. The upcoming earnings announcement on July 23, 2024, could be a significant catalyst for the stock.
Despite high growth potential, the discounted cash flow (DCF) valuation stands at $68.08, which is considerably lower than the current market price, suggesting an overvaluation. Analyst sentiment is mixed; although 28 analysts rate it as a 'buy', there are five 'holds' and five 'sells', resulting in a consensus slightly leaning towards 'buy'. However, a Guggenheim analyst has pointed out that without advancements like the robotaxi, Tesla's current valuation is hard to justify, which could weigh on investor sentiment.
News Impact
The delay in the robotaxi project reported on July 11 significantly impacted Tesla’s stock price. This development suggests potential issues in meeting ambitious timelines, raising questions about execution risks and future revenue streams. The failure to deliver on key innovations can undermine Tesla's valuation, especially as the market has priced in high expectations for growth and technological leadership.
Short-Term Predictions
For the next trading day, July 12, 2024, Tesla may continue to exhibit volatility given the high ATR and recent news. With the current RSI indicating overbought levels, further downside pressure is possible, potentially testing the support level at $231.26.
For the upcoming week, Tesla's stock performance may be contingent on any updates or clarifications regarding the robotaxi delay. The market may also look for reassurances from other upcoming projects or any guidance ahead of the earnings call on July 23.
Long-Term Investment Potential
The long-term potential of Tesla hinges on its ability to innovate and deliver on its ambitious projects such as the robotaxi. The intrinsic value calculated through DCF indicates a significant overvaluation, pointing to potential corrections if growth expectations are not met. The broad market sentiment holds some skepticism about sustaining such a high valuation without key technological advances.
Evaluation
Considering the data, Tesla appears to be a 'Hold' candidate. The current technical indicators show an overbought status, reflecting a potential short-term correction. Fundamental analysis reveals a high P/E ratio and an intrinsic value significantly below the market price, raising concerns about overvaluation. The delayed robotaxi project further adds to the uncertainty. While long-term growth prospects remain strong, the immediate risks and recent disappointing news warrant a cautious stance.
