Why Aren't More Analysts Recommending Tesla (TSLA)?

Tesla may be undervalued with strong growth indicators, but the 43 analysts following the company give it an rating of hold. Their target prices range from $21.27 to $297.72 per share, for an average of $175.6. At today's price of $246.39, Tesla is trading 40.31% away from its average target price, suggesting there is an analyst belief that shares are overpriced for the stock.

Tesla, Inc. designs, develops, manufactures, leases, and sells electric vehicles, and energy generation and storage systems in the United States, China, and internationally. Based in Austin, TX, the Large-Cap Consumer Discretionary company has 140,473 full time employees. Tesla has not offered a regular dividend during the last year.

Tesla has a trailing twelve month P/E ratio of 62.9, compared to an average of 22.06 for the Consumer Discretionary sector. Considering its EPS guidance of $3.16, the company has a forward P/E ratio of 78.0.

Furthermore, Tesla is overpriced compared to its book value, since its P/B ratio of 12.2 is higher than the sector average of 3.18. The company's shares are currently 490.9% below their Graham number, indicating that its shares have a margin of safety.

2018 2019 2020 2021 2022 2023
Revenue (M) $21,461 $24,578 $31,536 $53,823 $81,462 $96,773
Gross Margins 19% 17% 21% 25% 26% 18%
Net Margins -5% -4% 2% 10% 15% 15%
Net Income (M) -$976 -$862 $721 $5,519 $12,556 $14,997
Net Interest Expense (M) $663 $685 $748 $371 $191 $156
Depreciation & Amort. (M) $1,110 $1,370 $1,570 $1,910 $2,420 $3,330
Diluted Shares (M) 2,559 2,661 3,249 3,386 3,475 3,485
Earnings Per Share -$0.38 -$0.32 $0.22 $1.63 $3.61 $4.3
EPS Growth n/a 15.79% 168.75% 640.91% 121.47% 19.11%
Avg. Price $21.15 $18.24 $96.67 $260.0 $290.09 $246.39
P/E Ratio -54.23 -55.27 358.04 135.42 71.63 51.98
Free Cash Flow (M) -$3 $1,078 $2,786 $5,015 $7,566 $4,358
CAPEX (M) $2,101 $1,327 $3,157 $6,482 $7,158 $8,898
EV / EBITDA 85.22 40.58 71.21 87.33 55.06 62.83
Total Debt (M) $11,626 $11,801 $10,220 $5,342 $2,045 $4,657
Net Debt / EBITDA 11.0 4.25 -2.57 -1.45 -0.88 -0.96
Current Ratio 0.83 1.13 1.88 1.38 1.53 1.73
The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.

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