Roth Capital: Tesla should trade at a ‘quarter’ of its current stock price

Tesla Inc (NASDAQ: TSLA) on Monday said it will seek shareholder approval for a stock split, suggesting confidence in its future. Still, a Roth Capital analyst says the EV stock should not be worth more than $250.

Irwin defends his largely bearish call on Tesla

Craig Irwin’s price target on Tesla suggests a whopping 75% drop from here. Explaining why he has such a gloomy outlook on the electric cars manufacturer, the analyst said on CNBC’s “Squawk on the Street”:

Toyota, largest automotive company globally has a $300 billion valuation, sold 9 million cars last year. There’s nothing that Tesla has but Toyota doesn’t. Toyota has a much closer relationship historically to Panasonic. Tesla has a trillion-dollar valuation and sold just 900,000 cars.

He agrees that TSLA deserves a hefty premium for creating the first functioning marketplace for EVs, but still sees $300 billion as an appropriate valuation for Tesla even after applying that premium.

Tesla is yet to see real competition

According to Irwin, Tesla’s valuation largely stems from a lack of competition, but that landscape is expected to change quickly over the next five years. He noted:

By the end of 2025, there’ll be 500 EV models on the road; 60 new EV models coming this year. Many of them will be successful. Tesla is an exciting company, but I don’t see them doing 20 million vehicles. There’ll be too much competitive pressure.

Last week, however, Tesla officially launched its Berlin Gigafactory that’s expected to help ramp up production.

The post Roth Capital: Tesla should trade at a ‘quarter’ of its current stock price appeared first on Invezz.

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