'Tesla Stock Is Looking Precarious': Redditor Draws Comparison To Toyota — Bearish Technical Trend Prevails

Zinger Key Points
  • Concerns over Tesla stock's declining growth and high PE ratio, juxtaposed with Toyota's superior financial metrics, highlight a contrast.
  • Recent reports suggesting Tesla's shift away from low-cost vehicle plans raise questions about its strategic direction.

Tesla Inc TSLA stock was trading lower, Friday, after reports suggested that Tesla has shelved plans for a low-cost vehicle.

The report also suggested that the company may be opting instead to focus on self-driving technologies. CEO Elon Musk refutes these claims, challenging the credibility of the reports.

More Details Here: Tesla Reportedly Scraps Low-Cost Car Plans, Elon Musk Denies Story

Tesla stock was trading 3.6% lower at $164.88 at the time of publication Friday.

Redditor Warns About Tesla’s Growth Rate

In a recent Reddit post by user pravchaw on r/ValueInvesting, concerns were raised regarding Tesla stock’s declining growth trajectory and high price-to-earnings (PE) ratio. A comparison with Toyota Motor Corp TM highlighted significant differences.

CompanySymbolCurrent PriceMarket Cap ($M)P/E Ratio without NRIOperating Margin %
General Motors CoGM$43.6850,425.655.695.41
Toyota Motor CorpTM$239.16322,263.3210.5611.13
Tesla IncTSLA$171.22545,283.8959.459.19
Ford Motor CoF$13.2152,491.76.543.1

The Redditor placed Tesla stock under scrutiny over declining growth and a high price-to-earnings (PE) ratio. Comparatively, Toyota TM boasts higher operating margins, yet a lower PE, reflecting a more stable financial position.

Key Insights on Tesla stock from the Reddit Post

  • Tesla’s PE ratio stands at 59.45, significantly higher than Toyota’s 10.56.
  • Despite Tesla’s lower operating margin compared to Toyota, its market cap surpasses that of Toyota by a significant margin.

Financial Performance And Recent Challenges At Tesla

Tesla’s auto gross margins have dipped due to aggressive price reductions and the global chip shortage crisis. For the first time since 2020, the company saw its vehicle deliveries decline in the first quarter compared to the same period last year. Production disruptions from various factors, including the Red Sea conflict and factory shutdowns, have further impacted Tesla’s performance.

Technicals Indicate A Strongly Bearish Trend For Tesla Stock

Tesla’s stock price is below its short-term and long-term moving averages, indicating a strongly bearish trend.

Chart: Benzinga Pro

Multiple technical indicators, including the Moving Average Convergence Divergence (MACD) and Relative Strength Index (RSI), suggest a bearish sentiment towards Tesla stock.

Chart: Benzinga Pro

Tesla’s stock faces significant headwinds, including declining growth, production challenges, and negative technical indicators. Investors should carefully evaluate these factors before making investment decisions in Tesla.

Read Next: Tesla Offering $7K Discount On Model Y? Investor Says ‘Nothing Has Recently Changed’

Image generated using artificial intelligence with Midjourney.

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