Deep Dive
Tesla's Stock Decline
Tesla's stock has dropped 19% year-to-date in 2026, with Parkev Tatevosian attributing this to overvaluation. He had previously warned investors and purchased put options in late 2025. Despite the decline, he maintains a sell rating, questioning if the drop warrants an upgrade.
Energy and Delivery Numbers
Tesla's energy segment saw a decline, deploying 8.8 GWh compared to 10.4 GWh last year. Deliveries increased to 358,023, but last year's figures were impacted by production shutdowns. The automotive revenue is expected to be lower than Q1 2025's $13.967 billion.
Leasing and Economic Factors
Leasing of Tesla vehicles has decreased, with only 1-2% subject to lease accounting compared to 4-7% last year. Rising interest rates, driven by geopolitical tensions and oil prices, are likely influencing this trend. Higher oil prices might spur some EV interest.
Valuation and Forecasts
Tesla's forward PE ratio has decreased from 225 to 175, still high compared to peers. Tatevosian forecasts negative $6 billion in free cash flow for 2026 but anticipates a turnaround in 2027. He values Tesla's stock at $139, well below its current market price.
Long-term Growth and Valuation
Tatevosian gives Tesla a 7% long-term growth rate, the highest among companies he follows. Despite ambitious forecasts, the intrinsic value per share is $139. A 10% growth rate would raise this to $190, but the current market price is $365, indicating overvaluation.