Why this Tesla bear still sees a 60% crash in the EV maker's stock
Hardcore Tesla bear Ryan Brinkman at JPMorgan is still on patrol in the wake of the electric vehicle maker’s earnings on Wednesday night.
In a new note on Friday, Brinkman stayed the course with what is one of Wall Street’s most bearish calls on Tesla. Brinkman maintained an Underweight rating on Tesla’s stock (Sell rating equivalent) and a $145 price target, which assumes 61% downside in the stock from current levels.
Brinkman’s price target put him toward the low end of Wall Street’s forecasts on Tesla, according to Yahoo Finance data. For perspective, Tesla’s stock price hasn’t fallen below $200 a share since June 2024.
Why so bearish: Brinkman said that while first quarter results appear better, “we doubt sustainability, they don’t justify valuation, and we worry about other developments (including full self driving liability and runaway capex).”
Brinkman goes on to make a valid point on Tesla’s aggressive capex spending this year. “Capital expenditures appear increasingly related to aspects of the business that today generate little or no revenue, earnings, or operating cash flows,” he explained, “and they are rising again … to an incredible $25 billion vs. $8.5 billion last year (a year in which the company only generated $6.2 billion of free cash flow, ensuring a substantial free cash outflow in 2026).”
Four drivers of Tesla’s post-earnings stock decline: There were a few reasons Tesla stock fell 3.5% the day after earnings:
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The $25 billion capital expenditure guidance for 2025 was a lot for investors to digest, especially as the original guidance was for $20 billion and Tesla spent $8.5 billion last year.
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No date was given for the unveiling of the next Optimus robot.
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It would appear the robotaxi rollout is moving more slowly than expected.
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The energy business underperformed some Wall Street estimates.
First quarter by the numbers: Tesla reported a generally strong first quarter, headlined by its fastest revenue growth in three years. Total revenue rose 16% year over year to $22.39 billion, driven by a resurgence in demand across Europe and Asia.
The company significantly outperformed Wall Street expectations on profitability, posting non-GAAP earnings per share of $0.41, above estimates of $0.35.
Brian Sozzi is Yahoo Finance’s Executive Editor and a member of Yahoo Finance’s editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.
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