It has undoubtedly been a good month for electric vehicle maker Tesla (TSLA) and its outspoken CEO, Elon Musk. Indeed, Tesla stock hit a new multi-year high of more than $415 on Wednesday, continuing a huge four-month rally that has more than doubled its stock price and lifted its market cap to over $1.3 trillion. The surge has also made Elon Musk the first person in history to surpass a net worth of $400 billion.
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This is due not only to his stake in Tesla but also his holdings in X (formerly Twitter), Neuralink, The Boring Company, his AI venture xAI, and SpaceX. Interestingly, SpaceX saw its valuation recently hit $350 billion to become the world’s most valuable private company. Musk’s ability to take on huge risks and overcome challenges has paid off significantly for him, as he has become one of the most influential figures when it comes to innovation and global business.
Growing Success Prompts Valuation Concerns for Tesla
As Tesla continues to see success in the stock market, analysts are beginning to grow concerned about its valuation, according to TipRanks’ Bulls Say, Bears Say tool. Of course, they point out the company’s positive catalysts, such as Full Self-Driving software and the potential of its robotaxi business, but they also note that the price has become lofty even when compared to future earnings. This puts the stock at risk of a major correction should its financial performance disappoint even in the slightest bit.
Is Tesla Stock a Buy, Hold, or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on TSLA stock based on 12 Buys, 13 Holds, and nine Sells assigned in the past three months, as indicated by the graphic below. After a 75% rally in its share price over the past year, the average Tesla price target of $267.79 per share implies 35.37% downside risk.
