Tesla(US:TSLA) SPDB International·2025-07-25 08:27Investment Rating - The report maintains a "Hold" rating for Tesla, with a target price set at $298.2, indicating a potential decline of 10% from the current price of $332.6 [1][3]. Core Insights - Tesla's automotive business fundamentals continue to face pressure due to delays in the production of low-cost models, U.S. EV subsidies, and fluctuations in European EV demand. These impacts are expected to persist until the end of the year [1]. - Despite the challenges in the automotive sector, Tesla is committed to investing in AI, robotics, and energy sectors, which may provide long-term growth opportunities [1]. - The current price-to-earnings ratio for Tesla stands at 141.7x, reinforcing the "Hold" rating [1]. Financial Projections - Revenue projections for Tesla from 2023 to 2027 are as follows: - 2023: $96,773 million (19% YoY growth) - 2024: $97,690 million (1% YoY growth) - 2025E: $89,663 million (8% YoY decline) - 2026E: $109,192 million (22% YoY growth) - 2027E: $124,268 million (14% YoY growth) [2]. - Net profit projections are: - 2023: $14,997 million (19% YoY growth) - 2024: $7,091 million (53% YoY decline) - 2025E: $4,119 million (42% YoY decline) - 2026E: $6,721 million (63% YoY growth) - 2027E: $9,180 million (37% YoY growth) [2]. Recent Performance - In Q2 2025, Tesla's revenue decreased by 12% YoY but increased by 16% QoQ, with automotive sales revenue down 16% YoY but up 20% QoQ. The gross margin for Q2 was 17.2%, showing a slight decline YoY but an increase QoQ [8][11]. - Total expenses for Q2 approached $3 billion, reflecting a 1% YoY decrease and a 7% QoQ increase, indicating sustained high investment levels [8]. - The net profit for Q2 was $1.17 billion, down 21% YoY but up 187% QoQ [11]. Valuation - The valuation of Tesla using a sum-of-the-parts approach yields a target price of $298.2, corresponding to a P/E ratio of 143.0x for 2026 [8][13].