US stock futures muted as rate cut bets wane ahead of Jackson Hole
Wednesday, April 23, 2025
On Wednesday, Needham analyst Vikram Bagri maintained a Hold rating on Tesla (NASDAQ:TSLA) stock after evaluating the company’s first-quarter results and executive commentary. This aligns with the broader analyst consensus, as InvestingPro data shows 12 analysts have recently revised their earnings estimates downward. Bagri noted that Tesla’s automotive sector is experiencing ongoing strain and expressed skepticism regarding a demand rebound, particularly given the company’s weak gross profit margins of 17.86% and modest revenue growth of 0.95% over the last twelve months. This assessment is based on first-quarter data from California, a state with high electric vehicle adoption, where the refreshed Model Y is available for immediate delivery, which undermines the argument for pent-up demand.
Tesla’s leadership expressed optimism about the company’s autonomous driving technology being developed in Austin and the advances in Tesla Robotics. The company reiterated its timeline for launching a rideshare platform and indicated a swift geographical expansion. Additionally, Tesla provided milestones for the production of the Tesla Bot, suggesting that a larger portion of gross profits could originate from Autonomous and Robotics divisions than previously estimated by Needham.
Bagri’s analysis pointed out that the potential of Tesla’s autonomous driving and robotics initiatives seems to be largely factored into the current stock price. According to InvestingPro analysis, Tesla is currently trading at elevated multiples across various metrics, with a P/E ratio of 116.65. He suggested that for Tesla stock to experience significant growth, it would need to trade at 20 times Needham’s forecasted adjusted EBITDA for the fiscal year 2032, discounted to present value. For deeper insights into Tesla’s valuation and growth potential, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
The Hold rating indicates that Needham does not currently see a compelling reason for investors to either buy or sell Tesla stock based on the information available. With a beta of 2.58 and a significant year-to-date decline of 41.07%, Tesla exhibits high volatility characteristics. The firm’s stance reflects a cautious outlook on Tesla’s near-term growth prospects in the automotive market, balanced against the long-term potential of its autonomous driving and robotics endeavors. For a complete analysis of Tesla’s financial health and growth prospects, including 18 additional ProTips and detailed metrics, visit InvestingPro.
In other recent news, Tesla’s first-quarter 2025 earnings report drew varied responses from analysts. Stifel maintained a Buy rating with a $455 price target, highlighting Tesla’s profitability improvements and future plans for a lower-cost vehicle and Full Self-Driving technology. BofA Securities, however, held a Neutral rating with a $305 target, noting that Tesla’s earnings per share of $0.27 missed estimates, impacted by higher operating expenses in AI and R&D. Evercore ISI also kept an In Line rating with a $235 target, acknowledging the earnings miss and projecting potential downward revisions for future earnings per share estimates due to volume projections and expenses.
Goldman Sachs reaffirmed its Neutral stance with a $235 target, observing both positive and negative elements in Tesla’s report, including non-GAAP gross margins that exceeded expectations but concerns over tariff impacts and vehicle volumes. Tesla’s CEO Elon Musk announced plans to reduce his involvement with the US government, focusing more on Tesla and signaling that his work with cryptocurrency DOGE is largely complete. These developments come as Tesla’s shares saw a rise in premarket trading, alongside other major tech stocks. The company’s ongoing advancements in Full Self-Driving and Robotaxi services are viewed as potential long-term profitability drivers by some analysts.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.