Tesla (NASDAQ:TSLA) drew attention last week after CEO Elon Musk posted on social media that the company’s robotaxis were operating without safety monitors in the car. Was this the long-awaited start of the unsupervised autonomous driving Musk has been promising for quite some time?
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Not quite, actually. It turned out that Tesla had simply moved the safety monitor to another vehicle, which was following along in close proximity. While Musk hadn’t told a technical fib, critics jumped on his post for being a bit misleading.
One top investor, known by the pseudonym Stone Fox Capital, wasn’t thrilled by this “smoke and mirrors” gambit. Moreover, the 5-star investor doesn’t see any evidence that Tesla is close to any sort of autonomous breakthrough.
“My investment thesis remains bearish on the stock, with the current valuation pricing in a robotaxi success that isn’t clearly visible,” explains Stone Fox, who is among the top 3% of stock pros covered by TipRanks.
The investor points out that TSLA’s enhanced valuation of 206x forward earnings rests upon the assumption that the company will succeed in being one of the leaders in the future industry of autonomous driving. That’s looking increasingly unlikely, Stone Fox notes, especially given the fact that Alphabet’s Waymo is averaging 450,000 rides a week in six markets.
“Every day Tesla is delayed, Waymo becomes more and more the verb for taking a robotaxi, just like Googling is a term for an internet search,” Stone Fox emphasizes.
Adding insult to injury, the company’s main source of revenue is getting worse. Having previously shared its Q4 and full-year 2025 EV delivery numbers – both of which were down year-over-year – it’s clear that the market isn’t expecting great things tomorrow when the company reports its Q4 numbers.
In fact, Stone Fox cites consensus estimates for revenues of $24.75 billion (down 3.7% year-over-year) and EPS of $0.45 (down 38% year-over-year) as further evidence that the company is headed in the wrong direction.
“Investors should continue to use the current elevated stock price to sell Tesla on the ongoing robotaxi farce,” concludes Stone Fox, who rates TSLA a Sell. (To watch Stone Fox Capital’s track record, click here)
As for Wall Street, it’s a full-blown tug-of-war. Analysts are split right down the middle, with 10 Buys, 8 Holds, and 7 Sells, leaving Tesla stuck with a consensus Hold (i.e., Neutral) rating. TSLA’s 12-month average price target of $398.38 points to about 8% losses from current levels. (See TSLA stock forecast)
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.