Tesla’s Stock Takes a Hit Following Uninspiring Product Reveal
Tesla (NASDAQ: TSLA) saw its stock drop by 8.2% in early trading on Friday, as investors reacted negatively to the company’s recent “We, Robot” event held in Hollywood.
During the presentation, Tesla introduced several products, including a bartending Tesla Bot…
Image source: Tesla.
an autonomous Robovan with a capacity for 20 passengers…
Image source: Tesla.
and a two-door Cybercab, which is still confusingly labeled “Robotaxi” on the website.
Image source: Tesla.
CEO Musk’s Price Tag Challenge: $30,000
At the event, Tesla CEO Elon Musk announced an ambitious $30,000 price for the fully autonomous Cybercab and a price range of $20,000 to $30,000 for the Tesla Bot. However, he did not reveal a price for the larger Robovan, also claimed to be autonomous. Musk mentioned that he hopes the Cybercab will be available by 2026.
However, there are concerns. During the presentation, the Tesla Bots appeared to be remotely operated rather than genuinely autonomous. This raises questions about the feasibility of Musk’s $30,000 pricing for the Cybercab, especially since he promised a $25,000 electric car over five years ago, which has yet to materialize. In contrast, Chinese rival BYD has been thriving, with its new Seagull EV retailing for under $10,000.
The Value of Tesla Stock
The situation appears grim for Tesla enthusiasts. Musk’s proposals sound optimistic but seem far from reality. Currently, Tesla stock trades at 67 times its earnings and 448 times its considerably reduced free cash flow. Analysts from S&P Global Market Intelligence predict that profits will only increase by 15% annually over the next five years, which many view as insufficient to justify the stock’s high price.
Should You Put $1,000 into Tesla Now?
Before making an investment in Tesla, consider this:
The Motley Fool Stock Advisor analyst team recently released a list of the 10 best stocks to buy at present, and Tesla did not make the cut. The selected stocks are projected to yield significant returns.
For instance, if you had invested $1,000 in Nvidia when it was recommended on April 15, 2005, your investment would now be worth over $826,130!*
Stock Advisor guides investors with straightforward strategies, including portfolio advice, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the returns of the S&P 500 since 2002*.
See the 10 stocks »
*Stock Advisor returns as of October 7, 2024
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
