Tesla Analyst Gary Black Sells Entire $TSLA Holding Amid Concerns
Renowned Tesla analyst Gary Black of The Future Fund made headlines today as he announced the firm’s decision to sell its entire holding in Tesla, marking the first time since 2021 that they have not had a position in the company’s stock.
Black, known for his skepticism towards the electric vehicle manufacturer, has been relatively pessimistic about certain catalysts that many investors view positively. He outlined his concerns and reasoning for divesting the shares.
Let’s delve into each of Black’s apprehensions:
Concerns Over Tesla’s Valuation
Black mentioned that The Future Fund sold its shares at $358 per share, with a current price target of $310. This valuation is based on their forecast of Tesla’s 2030 volumes and adjusted earnings per share projections.
Main Focus on Price-to-Earnings Ratio
The primary concern for Black and his firm is Tesla’s high price-to-earnings ratio, currently standing at 188x for 2025. He highlighted that earnings estimates have been decreasing, driven by weak year-to-date deliveries and April results.
Skepticism Towards the Robotaxi Initiative
Black expressed skepticism regarding Tesla’s Robotaxi platform, believing that the risk-reward ratio associated with the Austin robotaxi test leans towards the downside. This is contrary to the belief that the Robotaxi project could be a major growth driver for Tesla.
Concerns About Affordable Models
Black raised concerns about Tesla’s plans for more affordable models, speculating that the offerings might be stripped-down versions of existing models rather than innovative new products. He questioned whether these models would truly expand Tesla’s total addressable market.
Despite these concerns, introducing lower-cost models could still attract a wider range of customers and capitalize on the value proposition of Tesla’s Full Self-Driving technology.
Ultimately, Black’s decision to divest from Tesla reflects his apprehensions about the company’s current valuation, delivery performance, and future growth prospects. It remains to be seen how Tesla will address these concerns and continue its trajectory in the ever-evolving electric vehicle market.