Noted Tesla bear Per Lekander, a hedge fund manager who has been shorting tesla, has made some bold predictions about the company’s future. Lekander told CNBC that he believes Tesla could “go bust” and that its stock could fall to $14. These comments came after Tesla reported 386,810 vehicle deliveries in the first quarter of the year, significantly below even the lowest market estimates. Lekander described Tesla’s recent performance as the “beginning of the end of the Tesla bubble,” which he considers to be one of the biggest stock market bubbles in modern history.
He attributed his bearish outlook to Tesla’s business model, which he believes is based on strong revenue growth, vertical integration, and direct-to-consumer sales. While this model is effective during periods of growth, Lekander argues that it becomes problematic when sales decline.
Lekander’s $14 price target for Tesla is based on an estimate that the company’s full-year earnings per share $1.40. He suggests that Tesla is currently overvalued at around 58 times forward earnings and should instead be valued at around 10 times forward earnings.
Other analysts have also expressed concerns about Tesla’s future. Richard Windsor, founder of Radio Free Mobile, called Tesla’s roughly $500 billion valuation “ludicrous” given the rising competition in the electric vehicle market. Dan Ives, a noted Tesla bull at Wedbush Securities, described Tesla’s first-quarter performance as an “unmitigated disaster” and warned of “darker days ahead” if the company does not turn things around.
Despite these concerns, Tesla still has its supporters. Cathie Wood’s Ark Invest recently bought Tesla stock for some of its funds, and some analysts, like Tom Narayan of RBC Capital Markets, believe that the reasons behind Tesla’s first-quarter delivery numbers are “one-time in nature.”
Tesla’s stock has already fallen more than 30% this year, and it remains one of the most divisive stocks on Wall Street. Whether Tesla can overcome these challenges and maintain its position as a leader in the electric vehicle market remains to be seen.