On Friday, Roth/MKM maintained a Neutral rating on Tesla (NASDAQ:TSLA) shares, with a steady price target of $85.00. The firm's stance comes in the wake of Tesla's announcement of its new CyberCab, which is expected to launch at approximately $30,000 starting in 2026. The unveiling event caught attention as the showcased vehicle, which transported CEO Elon Musk, lacked a steering wheel or visible controls.
The analyst from Roth/MKM expressed skepticism regarding the practicality of Tesla's unsupervised Full Self-Driving (FSD) technology, particularly in vehicles that rely solely on optical systems without manual controls. Despite the futuristic design and the promise of affordability, the firm saw the event as underwhelming due to the limited proof of the credibility of unsupervised-FSD in such a system.
Tesla's current models, the Model 3 (M3) and Model Y (MY), are anticipated to begin unsupervised-FSD trials in California and Texas next year. However, unlike the CyberCab, these trials are expected to take place in vehicles that are still equipped with conventional driving controls.
The analyst's remarks follow Tesla's strategy to push the boundaries of automotive technology with its ambitious plans for the CyberCab. The company's approach to driverless technology, particularly in a vehicle without traditional controls, remains a topic of interest and scrutiny within the automotive industry.
In summary, Roth/MKM's reiteration of the Neutral rating and $85.00 price target reflects a cautious outlook on Tesla's latest innovation. The firm awaits further evidence of the viability of Tesla's unsupervised-FSD technology before adjusting its stance on the electric vehicle maker's stock.
In other recent news, Tesla has maintained its rating from a variety of investment firms following its Robotaxi event in Los Angeles. The event emphasized Tesla's commitment to autonomy, but did not alleviate concerns about the company's near and medium-term performance. Truist Securities, Oppenheimer, and Morgan Stanley maintained their Hold, Perform, and Overweight ratings respectively, while Bernstein SocGen Group upheld an Underperform rating.
Tesla's earnings and revenue continue to be a focal point for investors, with the company's gross profit, closely tied to vehicle deliveries, seen as a critical factor in its financial health. The company's recent developments in the autonomous vehicle industry have been met with mixed reactions, with concerns raised about the efficiency of the company's learning cycles and the lack of significant advancements in its Full Self-Driving technology.
Tesla's CEO, Elon Musk, has ambitious plans for autonomous robotaxis and humanoid robots, with the production of the fully autonomous Cybercab set to begin by 2026. The company also plans to introduce unsupervised Full Self-Driving features in its Model 3 and Y vehicles in Texas and California next year.
In addition, Tesla has converted 500 temporary positions into permanent jobs at its German gigafactory in Gruenheide, near Berlin. These are the recent developments shaping Tesla's trajectory in the electric vehicle and autonomous technology industry.
InvestingPro Insights
Tesla's ambitious plans for the CyberCab and its push into unsupervised Full Self-Driving technology come at a time when the company's financial metrics paint a complex picture. According to InvestingPro data, Tesla boasts a substantial market capitalization of $762.78 billion, reflecting its dominant position in the electric vehicle market. However, the company's P/E ratio of 61.38 suggests a high valuation relative to earnings, which aligns with the InvestingPro Tip indicating that Tesla is "Trading at a high earnings multiple."
Despite the skepticism surrounding the CyberCab's practicality, Tesla's financial health appears robust in certain areas. An InvestingPro Tip highlights that the company "Holds more cash than debt on its balance sheet," which could provide financial flexibility as it pursues innovative projects like the CyberCab. Additionally, Tesla's revenue for the last twelve months stands at an impressive $95.32 billion, although the revenue growth of 1.37% suggests a slowdown in expansion.
Investors considering Tesla's stock in light of these developments should note that the company's stock price movements "are quite volatile," as pointed out by another InvestingPro Tip. This volatility is evident in the 36.75% price return over the past six months, contrasting with a -9.21% return over the past year.
For those seeking a more comprehensive analysis, InvestingPro offers 19 additional tips on Tesla, providing deeper insights into the company's financial position and market performance.
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