‘Take the Money and Run,’ Says Investor About Tesla Stock

The Elon Musk reality show has taken some twists and turns this year, and Tesla, Inc. (NASDAQ:TSLA) has come along for the ride. It is no secret that Musk’s affiliation with President Trump and right-wing politics has come at a cost to his personal brand, and this had a direct impact on Tesla’s revenues during Q1.

While sales and deliveries have been weakening this year, such is the market’s faith in Musk that his decision to scale back his DOGE responsibilities sparked a bull rally for TSLA during the last few weeks.

In fact, since reaching a low point in early April, the share price has surged more than 60% – with almost all the gains coming after Musk shared the news of his shifting priorities on the company’s Q1 2025 earnings call last month.

While investor excitement in the future has been pushing TSLA upwards, the profound damage to Tesla’s image in the here and now is clearly reflected in the numbers. Just yesterday, for instance, the European Automobile Manufacturers’ Association announced that Tesla sold 7,261 EVs in the EU last month – a massive 49% year-over-year decline.

Citing this and other troubling sources of concern, investor A.J. Button sees mounting losses up ahead.

“The company’s competitive position is deteriorating,” explains the 5-star investor. “Tesla’s earnings declined last quarter, with little coming up that would indicate a turnaround is imminent.”

Beyond the EU – which Button acknowledges is not Tesla’s largest market – Trump’s unpopularity in China, Mexico, and Canada is likely to hurt sales in these geographies, too. Moreover, in China, domestic companies such as BYD are proving to be more popular than Tesla.

And yet, despite the headwinds, Button notes that the company share price remains “extremely pricey” at 162x price-to-earnings – or almost 1,000% more expensive than the sector median.

“Markets still see this as a growth stock, even though it ceased growing many quarters ago,” adds Button.

While the energy business is growing, Button does not believe it will be large enough to “move the needle” for TSLA for years to come. In addition, the investor points out that the potential launch of a robotaxi fleet is also a ways away.

Elon Musk’s “star power” won’t be enough to keep the rally going, cautions Button. In other words, it is time to take the profits and run.

“The bottom line on Tesla stock is that it is just too pricey for a company with no growth,” concludes the investor, who rates TSLA a Sell. (To watch A.J. Button’s track record, click here)

Wall Street is decidedly mixed when it comes to TSLA. With 16 Buys, 10 Holds, and 11 Sells, TSLA has a Hold (i.e. Neutral) rating. Its 12-month average price target of $282.70 has a downside of ~21%. (See TSLA stock forecast)

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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.