Tesla (TSLA) Valuation Check After Morgan Stanley Downgrade and Mixed EV, AI and Energy Signals

Morgan Stanley’s downgrade of Tesla (TSLA) is colliding with weaker U.S. sales and rising competition at the same time that investors are getting excited about progress in Full Self Driving and Tesla’s fast growing energy storage business.

See our latest analysis for Tesla.

Tesla’s share price has shrugged off much of the EV gloom, with a 30 day share price return of 14.17% and year to date gain of 21.01%. The three year total shareholder return of 205.50% shows that long term momentum, although choppier lately, is still very much intact.

If this mix of excitement and risk around Tesla has you thinking about what else is out there, it might be a good time to compare it with other auto manufacturers that are reshaping the auto landscape.

With Tesla now trading above many analyst targets despite slowing EV sales and a sky high valuation tied to autonomy and robotics, investors have to ask: is this a fresh buying opportunity, or is future growth already priced in?

Most Popular Narrative Narrative: 7.9% Overvalued

With Tesla last closing at $458.96 against a narrative fair value of $425.37, the stage is set for a debate about how far future optionality can stretch today’s price.

If Tesla executes on these high growth, high margin opportunities, it could reach a multi trillion dollar valuation by 2035, making today’s sentiment driven sell off an attractive buying opportunity.you can view my valuation model and assumptions here: https://docs.google.com/spreadsheets/d/1VsYZE6TRMpp_j7ba9NDZCNqBBRGYYlJa1w7D9WTLvY0/edit?usp=sharing

Read the complete narrative.

Want to see how an auto maker earns a tech style valuation? According to BlackGoat, the secret lies in aggressive revenue scaling and future rich profit margins. Curious which long term growth and earnings assumptions have to hit for that outcome to work? The full narrative unpacks the math behind that bold price target.

Result: Fair Value of $425.37 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, stubborn regulatory delays on FSD or a deeper price war with Chinese EV makers could quickly puncture these lofty AI and robotaxi expectations.

Find out about the key risks to this Tesla narrative.

Build Your Own Tesla Narrative

If you see Tesla’s story differently or want to dig into the numbers yourself, you can build a custom narrative in just a few minutes: Do it your way.

A great starting point for your Tesla research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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