Tesla's (TSLA, Financial) stock experienced a decline of 4.79%, with its current price at $324.15. This downward movement is attributed to ongoing challenges in Tesla’s international electric vehicle (EV) sales as consumers show a growing preference for competing models.
In the first quarter, Tesla delivered approximately 337,000 vehicles, marking the lowest delivery count in over two years. Reports indicate a substantial 28% reduction in Tesla's sales in the European Union, Britain, and the European Free Trade Association, with only 13,863 units sold in May. This decline has resulted in Tesla’s market share in Europe decreasing by 0.6% year-over-year to 1.2% in May. Despite the European Union's tariffs on Chinese electric vehicles, Chinese brands are expanding significantly within the European market.
Projections for Tesla's second-quarter deliveries suggest an expected delivery count of around 393,000 vehicles, an 11% year-over-year decline. This anticipated decrease continues to fuel investor concerns regarding Tesla's competitive positioning in the global EV market.
From a financial perspective, Tesla (TSLA, Financial) maintains strong financial strength, supported by an Altman Z-Score of 14.96 and a debt-to-equity ratio of 0.18. The company's Price-to-Earnings (PE) ratio is at 178.1, indicating a high valuation relative to its earnings. The Price-to-Book (PB) ratio stands at 13.98, reflecting a significant premium over the industry's median.
In terms of growth, Tesla's revenue has slowed down, with an annual growth rate of just 0.5% over the past year. However, over five years, the company has achieved a robust revenue growth rate of 29.6%. On the profitability front, the expanding operating margin is a positive sign, though the Return on Invested Capital (ROIC) remains below the Weighted Average Cost of Capital (WACC), indicating potential inefficiencies in capital deployment.
With a market capitalization of $1.04 trillion and a cash to debt ratio of 2.82, Tesla (TSLA, Financial) is positioned as a dominant player in the industry but faces valuation challenges. GuruFocus rates the stock as "Significantly Overvalued" based on its GF Value of $243.6, suggesting caution for potential investors.
