Tesla (NASDAQ:TSLA) investors finally got what they’ve been hoping for – Elon Musk’s attention. On the Q1 2025 earnings call, Musk said he’s stepping back from his political involvement in Washington, D.C., and shifting his focus back to running Tesla.
That alone was enough to lift TSLA shares, with many seeing Musk’s renewed commitment as a much-needed positive.
And frankly, investors needed something to get excited about – because the earnings themselves were a letdown. Tesla missed big on both revenue and profit, with sales dropping 9.2% year-over-year to $19.34 billion, falling short of expectations by $2.07 billion. EPS wasn’t any better, coming in at $0.27 – $0.15 below estimates and a steep 30% miss.
Little of this was truly surprising, as Tesla had already shared its Q1 EV delivery numbers of 336,681, which were down over 30% from Q4 2024. The company chalked up much of this decreased demand to customers waiting for the launch of the revamped Model Y, though it was also fairly obvious that the Tesla brand took a hit due to Musk’s political leanings.
Investor Jonathan Weber didn’t mince words, calling it a “disaster quarter” and suggesting shareholders to move on.
“While there is a chance for an eventual AI/robotics/self-driving breakthrough, I believe that Tesla stock does not look attractive at all at current prices,” argues the 5-star investor, who is among the top 2% of TipRanks’ stock pros.
One of his biggest concerns is that the demand drop isn’t due to rising prices, it’s the opposite. Tesla’s average selling price fell from $45,000 to $41,500 over the past year. Fewer people are buying, even with lower prices, and that’s a red flag.
Its not just Musk’s controversial persona, adds Weber, that has hurt sales. Competition in the EV industry is heating up, and the investor explains that Tesla will therefore need a “home run” with one of its technological innovations such as AI, robotaxis or self driving in order to justify its steep valuation.
Suffice it to say, Weber has his doubts that this will happen.
“It is possible that Tesla eventually hits a home run with one or several of these ventures – but I believe that this isn’t guaranteed at all,” concludes Weber, who rates TSLA a Sell. (To watch Weber’s track record, click here)
Wall Street, on the other hand, is a bit more divided. TSLA holds a consensus Hold (i.e., Neutral) rating, based on 16 Buys, 11 Holds, and 12 Sells. The average price target sits at $283.07, suggesting around 9% upside from current levels. (See TSLA stock forecast)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.
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.