Can Tesla Stock Plummet 30%?

Core Insights - Tesla's shares have increased by 18% over the last month, currently priced at $475, despite challenges in its core automotive business due to competition and a slowdown in EV demand [1] - Investor optimism is driven by advancements in Tesla's AI developments, particularly the Robotaxi program, which has begun testing vehicles without safety drivers [1] Valuation - Tesla's valuation is considered very high, with a target price of $330 suggested based on a comprehensive analysis [3][6] - The stock is viewed as unattractive due to its very high valuation relative to its operational performance and financial status [3] Financial Performance - Tesla has a market capitalization of $1.5 trillion and has experienced an average top-line growth rate of 9.3% over the past three years [5][7] - Revenues decreased by 1.6% from $97 billion to $96 billion in the last 12 months, but quarterly revenues increased by 11.6% to $28 billion from $25 billion a year earlier [7] - Operating income over the last 12 months was $4.9 billion, with an operating margin of 5.1% and a net income of approximately $5.1 billion, indicating a net margin of around 5.3% [8] Debt and Cash Position - Tesla's debt stands at $14 billion, with a debt-to-equity ratio of 1.0% [8] - The company holds $42 billion in cash (including cash equivalents) out of total assets of $134 billion, resulting in a cash-to-assets ratio of 31.1% [8] Market Performance - Tesla's stock has underperformed compared to the S&P 500 during economic downturns, with significant declines observed during the 2022 inflation shock and the 2020 COVID pandemic [9][11] - The stock dropped 73.6% from a peak of $409.97 on November 4, 2021, to $108.10 on January 3, 2023, but fully recovered to its pre-crisis high by December 11, 2024 [11]