Electric vehicle (EV) maker Tesla (TSLA) stock’s 2-day rally has led to short sellers losing $3.5 billion. Tesla reported better-than-expected Q3 FY24 earnings on October 23. Over the next two trading days, Tesla shares rose 22.3%. Short sellers lost their yearly gains during this brief two-day rally, with some even entering the red territory.
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According to a report from S3 Partners, shorts sellers lost $1.7 billion in accumulated profits this year and have marked $1.8 billion in mark-to-market losses. While analysts had expected a 10% decline in earnings, Tesla surprised the markets with a 9% year-over-year increase. Investors are also wondering if Tesla’s healthy delivery outlook for 2025 implies that the softening in EV demand is finally over. In just one day, Tesla added $150 billion in market capitalization, the largest single-day jump since 2013.
What Do Analysts Say About Tesla Stock?
Despite the stellar earnings performance, analysts remain divided on Tesla stock. Following the Q3 print, four analysts rated Tesla a Buy, two rated the stock a Sell, and four analysts rated it a Hold.
Most recently, Bernstein analyst Toni Sacconaghi reiterated a Sell rating on Tesla with a price target of $120, implying 55.4% downside potential from current levels. The analyst noted that although Tesla’s Q3 margins improved, he sees little improvement in upcoming quarters. The analyst is also concerned about Tesla’s valuation, which is dependent on its full self-driving capabilities and the launch of the humanoid robots. Sacconaghi’s Sell rating stems from these vulnerabilities.
On the other hand, Canaccord Genuity analyst George Gianarikas maintained a Buy rating on Tesla and lifted the price target to $298 (10.7% upside potential) from $278. The analyst is highly encouraged by Tesla’s future prospects based on a multitude of businesses, including EVs, artificial intelligence (AI), energy storage panels, and humanoid robots. Gianarikas’ higher price target is a result of the increase in the 2026 PE (price-to-earnings) multiple from 34x to 36x.
Is Tesla a Buy, Hold, or Sell?
Based on the differing analysts’ views, TSLA stock has a Hold consensus rating on TipRanks. This is backed by 11 Buys, 16 Holds, and eight Sell ratings. Also, the average Tesla price target of $207.83 implies 22.8% downside potential from current levels. Year-to-date, Tesla shares have gained 8.3%.
