Tesla's valuation is currently inflated, presenting substantial risks of depreciation, as highlighted by hedge fund investor Per Lekander, a vocal skeptic of Tesla's market position.
Lekander, who has been betting against Tesla's stock since 2020, shared his concerns with CNBC, pointing out the significant 34% drop in Tesla's share value this year. This decline is attributed to growing doubts about electric vehicle (EV) demand and Elon Musk's ongoing involvement. Furthermore, Tesla's recent performance, marked by lower-than-expected vehicle deliveries, exacerbates Wall Street's diminishing confidence in what was once a market darling.
Lekander believes we are witnessing the deflation of what he deems the most substantial stock market bubble of recent times. He boldly suggests that Tesla could face insolvency, predicting a dramatic fall in its stock price to as low as $14 per share, a stark 91% decline from its current valuation.
He critiques Tesla's operational model, which relies heavily on continuous growth and direct sales to maintain profitability and cover fixed expenses. However, with sales reversing, Tesla is confronted with mounting fixed costs and a challenging cash flow situation.
The investor also raises concerns over Tesla's product pipeline. With most of Tesla's revenue generated from its Model 3 and Model Y vehicles and no new model expected until potentially 2026, Tesla's offerings may become outdated, especially as competitors like Volkswagen are set to introduce around 13 new models this year.
Lekander anticipates Tesla's upcoming earnings report will reveal significant challenges within the company, suggesting a bleak outlook for the next two years due to the aging model lineup and a stagnating economy.
Despite Lekander's bearish stance, which has seen him miss out on Tesla's 354% surge in stock price since 2020, other analysts, such as those from Wedbush, maintain a more optimistic view. They acknowledge a difficult first quarter but predict a potential 66% upside for Tesla's stock, indicating a divergent perspective on the company's future performance and resilience in the face of current challenges.
