Guggenheim has expressed concerns over Tesla's (TSLA, Financial) current financial health, suggesting that the company's core fundamentals are weakening rapidly, despite being buoyed by discussions around robotaxis and political factors. The firm highlights that second-quarter delivery trends indicate that the updated Model Y has not significantly boosted sales, forecasting notable downward revisions in Q2 delivery estimates soon. Guggenheim’s estimate stands at 360,000 deliveries, considerably lower than the market consensus of 415,000.
With these diminished delivery expectations, Tesla's automotive gross margin projection drops to 11.5%, significantly below the average estimate of 14.0%. Additionally, the company's free cash flow is predicted to turn negative. The analyst notes that the anticipated demand for the Model Y's update was expected to enhance Q2 performance, yet signals a risk of further declines in future delivery volumes or pricing. Guggenheim remains skeptical about the optimistic outlook for Tesla in 2025 and 2026, noting that bullish catalysts for the automotive sector are not materializing. They maintain a Sell rating on Tesla shares with a price target of $175. In premarket trading, Tesla shares have decreased by 2% to $313.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 43 analysts, the average target price for Tesla Inc (TSLA, Financial) is $289.30 with a high estimate of $500.00 and a low estimate of $19.05. The average target implies an downside of 9.34% from the current price of $319.11. More detailed estimate data can be found on the Tesla Inc (TSLA) Forecast page.
Based on the consensus recommendation from 55 brokerage firms, Tesla Inc's (TSLA, Financial) average brokerage recommendation is currently 2.7, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Tesla Inc (TSLA, Financial) in one year is $269.85, suggesting a downside of 15.44% from the current price of $319.11. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Tesla Inc (TSLA) Summary page.
TSLA Key Business Developments
Release Date: April 22, 2025
- Gross Profit for Energy Storage: Record gross profit achieved in Q1.
- Vehicle Deliveries: Decline due to factory updates and reduced production.
- Auto Margins: Declined sequentially due to lower deliveries and fixed cost absorption.
- Energy Storage Deployments: Sequential decline, but highest gross profit recorded.
- Operating Expenses: Increased due to AI initiatives and vehicle program developments.
- Other Income: Significant reduction due to Bitcoin mark-to-market loss.
- CapEx Guidance: Forecasted to exceed $10 billion for the year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Tesla Inc (TSLA, Financial) is on track to launch fully autonomous rides in Austin by June, with plans to expand to other cities by the end of the year.
- The company has made significant progress in localizing supply chains, reducing logistics risks and tariffs impact.
- Tesla Inc (TSLA) achieved a record gross profit for its energy storage business in Q1, with strong demand for Megapacks.
- The Optimus humanoid robot project is progressing well, with expectations to scale production to thousands of units by the end of the year.
- Tesla Inc (TSLA) continues to lead in AI and autonomous technology, with plans to have millions of autonomous vehicles operating by the second half of next year.
Negative Points
- Tesla Inc (TSLA) faced a decline in vehicle deliveries in Q1 due to factory updates and negative brand perception in certain markets.
- The company is experiencing challenges related to tariffs, particularly affecting the energy business due to reliance on Chinese LFP battery cells.
- Auto margins declined sequentially due to lower deliveries and reduced regulatory credit revenues.
- The Optimus robot production is affected by supply chain issues, particularly with permanent magnets from China.
- Tesla Inc (TSLA) is facing increased operating expenses due to investments in AI initiatives and new vehicle programs.
