Connect with us

Hi, what are you looking for?


Clean Transport

Jefferies Analyst Warns Tesla May Take Longer To Reach Profitability Than Expected, Stock Falls On Cue

An analyst for Jefferies by the name of Philippe Houchois has warned that Tesla’s stock is highly overvalued, and that the company may end up rising far longer to achieve “profitability” than is commonly supposed.

An analyst for Jefferies by the name of Philippe Houchois has warned that Tesla’s stock is highly overvalued, and that the company may end up rising far longer to achieve “profitability” than is commonly supposed.

Following the releases of his research note, Tesla’s stock fell a bit (~2.1%) — down from record highs in the high $300s.

“Achievements to-date and vision are impressive, but we don’t think Tesla’s vertically integrated business model can be scaled up as profitably and quickly as consensus thinks and valuation multiples imply,” Houchois argued in his research note.

Reuters provides more: “Houchois’ $280 price target was well below the median analyst price target of $337.50, according to Thomson Reuters data.

“Musk is counting on the recently launched Model 3, Tesla’s least pricey car, to make the Palo Alto, California company profitable and establish it as the leading electric carmaker ahead of BMW, General Motors, and other long-established players. Wall Street’s confidence in Musk has sent Tesla’s stock up 83% over the past year to record highs.

“… Eight analysts recommend buying Tesla’s stock, while another eight recommend selling, and eight others have neutral ratings, according to Thomson Reuters data. That makes Tesla one of the 10 most poorly-rated stocks in the Nasdaq 100 index.”

With regard to Houchois’ research note…

At this point, I think it should be clear to even the most naive of those who put money into the stock market that “analyst” opinions should be taken with a hefty grain of salt. Who benefits from the perspective presented? Who is paying whom? What are the likely long-term motives for views given? Etc.

All of that said, Tesla’s stock may well be “overvalued” going on achievements to date. Something that seems to elude many analysts nowadays, though, is that some investors may be simply “investing” into a company, rather than gambling on it with short-term gains being the motive.

The current regulatory environment certainly seems to encourage highly lucrative short-term gambling (if you’re lucky) at the expense of actual long-term investment strategies, so this isn’t too surprising. Though, from the perspective of company accountability and good stewardship by execs, it arguably is unfortunate.

So, to expand on that point, a great many of the Tesla investors that I’ve spoken to over the last few years have been putting money into the company’s stock partly out of the belief that the company is doing something that is necessary. In other words, the investors are actually investing something into the company itself, rather than just into their own desire to make a quick buck.

That must be really confusing to people who don’t think that way. Hence the recent fate of those short-selling Tesla’s stock. I will note here, though, so that I’m not accused of being unrealistic, that I think Tesla’s stock likely is overvalued a fair bit at this point — as the whole market itself is. The market as a whole is so heavily rigged and overinflated at this point that I certainly wouldn’t blame anyone for taking money out of any stock, including Tesla’s.

Appreciate CleanTechnica’s originality and cleantech news coverage? Consider becoming a CleanTechnica Member, Supporter, Technician, or Ambassador — or a patron on Patreon.

Don't want to miss a cleantech story? Sign up for daily news updates from CleanTechnica on email. Or follow us on Google News!

Have a tip for CleanTechnica, want to advertise, or want to suggest a guest for our CleanTech Talk podcast? Contact us here.
Written By

James Ayre's background is predominantly in geopolitics and history, but he has an obsessive interest in pretty much everything. After an early life spent in the Imperial Free City of Dortmund, James followed the river Ruhr to Cofbuokheim, where he attended the University of Astnide. And where he also briefly considered entering the coal mining business. He currently writes for a living, on a broad variety of subjects, ranging from science, to politics, to military history, to renewable energy.


You May Also Like

Autonomous Vehicles

After 79 days without it, we recently regained access to Tesla FSD Beta (V10.69), along with Tesla’s latest software version, 2022. 20.15. A week...


Elon Musk has an ambitious goal for 2030 for Tesla. He wants the US automaker to be producing 20 million vehicles a year by...


Tesla Owners Florida, in partnership with Tesla and The Electrified Garage, invites the Tesla community to attend TeslaCon Florida 2022. A weekend of fun on the Florida...


“Troy Teslike” tracks Tesla data like no one else I know. In the past day, he published an interesting 2½ year breakdown. The table,...

Copyright © 2021 CleanTechnica. The content produced by this site is for entertainment purposes only. Opinions and comments published on this site may not be sanctioned by and do not necessarily represent the views of CleanTechnica, its owners, sponsors, affiliates, or subsidiaries.