Tesla Stock Is “Egregiously Overvalued,” Won’t Last As Rivals Fill The EV Space: Analyst

Name: Tesla Stock Is “Egregiously Overvalued,” Won’t Last As Rivals Fill The EV Space: Analyst
Uploaded: 2023-07-04T09:15:46Z
Description: Craig Irwin says that the Austin-based firm is “egregiously overvalued” and that it will be increasingly hard for Tesla to see the same growth going forward.

One analyst says that Tesla’s biggest rally stock since 2020 could soon come to a halt.

Red Tesla Model Y

Photo by: Tesla

Iulian Dnistran

By: Iulian Dnistran

Jul 4, 2023 at 5:15am ET

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Tesla might not be able to continue its biggest stock rally since 2020, according to ROTH Capital Partners’ Craig Irwin, who said that he’s skeptical about the Elon Musk-led company’s ability to maintain its current share price over the long term, according to Autoblog.

Speaking with Yahoo Finance, Irwin said that with traditional automakers like Ford and General Motors ramping up their EV output, investors might lose interest in Tesla, realizing that there are a lot of new choices out there.

"I've maintained my long-term bear stance," he told Yahoo Finance. "It's a great company, they played a huge role in transforming transportation, but you've got 100 new EVs coming to market."

Tesla’s stock has risen 109 percent this year, with shares benefiting from both an artificial intelligence-fueled rally and investors’ perception that CEO Elon Musk’s focus went back to growing the EV brand since he brought Linda Yaccarino to run Twitter, which he also owns.

However, Craig Irwin says that the Austin-based firm is “egregiously overvalued” and that it will be increasingly hard for Tesla to see the same growth going forward.

"These big names – Ford and General Motors – there's lots of old guard that's coming in with pretty compelling vehicles that I think is going to compete effectively and make it harder for Tesla to see the growth and the margins they've been achieving going forward."

Another factor seen by Irwin as a cause for the possible lowering of Tesla’s stock price is the continued delay of the much-anticipated self-driving technology, which is still years away from being a major source of income.

"It's beautiful that they're pushing hard to develop the technology – I just think that others will be more careful in introducing things to the market," Irwin told Yahoo Finance.

In Q2 2023, Tesla set a new record for deliveries in a single quarter, shipping 466,140 vehicles around the globe and beating its previous record of 422,875 cars delivered in Q1 2022. It’s also worth noting that the American firm brings in revenue from its Supercharger network, as well as its battery and solar businesses.

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Furthermore, the Austin-based marque is preparing to launch two new cars – the heavily anticipated Cybertruck and the facelifted Model 3, also known as “Highland” – which could prove ROTH Capital Partners’ analyst wrong, but only time will tell what will happen.

As always, we’d like to know what you think about this, so head over to the comments section below to give us your thoughts.