TSLA Stock Forecast: Is Tesla a good stock to buy?

 

Tesla Stock Forecast 2023: Tesla Stock Forecast for the next 12 months is $311


Latest Tesla Stock Price

Tesla Stock Performance in 2022

  • Last 1 Month: (-6.1%)
  • Last 6 Months: (-24.4%)
  • YTD: (-43.1%)

Impact of Tesla acquisition on Tesla Stock

Elon Musk completed the acquisition of Twitter on October 27, 2022, for $44 billion. Wedbush analysts commented that this $44 billion deal will be one of the most overpaid deals in history.  Immediately after the completion of the deal, Elon fired the top executives including the CEO.

This deal comes as a relief for the investors who were concerned about the impact of the deal on Tesla stock. Elon sold $15 billion of Tesla’s stock to finance the deal and as the acquisition has now been completed, Elon will not sell any more Tesla stocks. Analysts are expecting to see an increase in the stock price.

However, there are concerns about how Elon will manage running Tesla, SpaceX, Twitter, and his other businesses. Tesla stock whose share price is already down by 43% from the past 1 year and has lost around 34% since the announcement of the deal. Tesla’s market cap has gone down from $1.14 trillion in April to $718 billion today. Also, a noteworthy point is that twitter’s interest rate expenses per year are expected to be $1.2 billion on its debt and with the increasing interest rates, this number will increase. So, Elon’s other primary goal would be to increase revenues and profits for Twitter and analysts also expect that Twitter might not become free cash flow positive until 2025.  Twitter is struggling and it requires Elon’s full attention to fix this company. So, Elon’s focus on Tesla may reduce which can affect its future.

Tesla Stock Forecast 2023: Factors That Can Affect Tesla Share Price in 2023

Mismatch of Demand and Supply/Production

As the US and other countries battle out recession fears, Tesla Inc cannot be untouched by the possibility of slowing down the demand for its EVs. It was evident in the Q3 2022 results announced on October 19th, 2022. The company posted a total profit of $3.3 billion and $21.45 billion in revenue. But the surprise was that the company produced 22,000 more vehicles than it could deliver.

It signals to some analysts that the company could not maintain demands for its models. However, Elon Musk said that the company expects intense orders in Q4 and to sell all the produced cars. The company attributed transportation issues as the main reason for the shortfall in deliveries which is increasingly becoming expensive.

Tesla management still believes they have a vast supply and aggressively plans to ramp up production in new factories like Shanghai, Berlin, and Austin. Analysts believe that Tesla has not experienced a macroeconomic slowdown of such a large scale since its inception, and present conditions will be the testing time for Tesla Inc, and its approach to better manage the inventory will be key going into 2023.

Twitter Saga and its Impact on Tesla Inc

There is no doubt that CEO Elon Musk has taken Tesla Inc to the present heights. But of late, Elon Musk has found ways to antagonize stakeholders whether it is consumers, investors, or even politicians. It started with Elon’s buying a 9.2% stake in Twitter without declaring and then making a $44 billion offer to buy out the company.

But Tesla’s CEO soon made a U-turn on his offer, claiming that the number of spam accounts on Twitter is much higher than the company’s assertion. After running for months and realizing that he had a slim chance of succeeding in scraping the deal, on October 4th, he offered again to proceed with the Twitter buyout at the initially set price.

Twitter is a political minefield and could lead to antagonizing potential customers many of whom loved Tesla and Elon Musk.

Operation of Berlin Gigafactory and production of Cybertruck

Elon Musk inaugurated Berlin Gigafactory in April 2022, and the factory was slated to start by the end of 2022 with a capacity of 500,000 Model Y each year. It also can produce 50- Gigawatt hours of rechargeable batteries.

But, now, according to a news report, due to problems in the production process, the new Gigafactory facility will not be able to mass produce electric battery cells at least by 2024. This news will hurt the possibility of reaching the production of 500,000 annually anytime soon. It is some bad news for Tesla investors.

Also, Tesla’s most anticipated model Cybertruck was expected to be in mass production by the end of 2022. But, still, there is no confirmation. Although some drone pictures claim to have spotted prototypes of Cybertruck in the Texas Gigafactory, where they are scheduled for production, Tesla’s management has not yet confirmed the same.

Tesla has over a million backlog orders for Cybertruck, and the company is way behind schedule. If production starts in 2023, it will be a big boost for the company and add to revenue and profits. But otherwise, it will a dent in the image of Tesla Inc.

The Future of Self-Driving Vehicles

Tesla is one of the pioneers in giving its buyers access to self-driving capabilities. Elon Musk has increased the charges for receiving complete self-driving updates to $15,000. The price has increased from $10,000 at the beginning of 2022 to $15,000. Tesla believes getting regulatory approval for a self-driving vehicle can charge up to $100,000 or more from vehicle purchasers. The discounted price at present reflects the absence of statutory approval.

Elon Musk promised investors that the full self-driving (FSD) feature would be available by the end of 2022, but that hasn’t happened. It is expected to be available in 2023 and could open a new revenue stream for Tesla Inc.

Elon Musk promised investors that the full self-driving (FSD) feature will be available by end of 2022, but as usual, these are false promises. Now, it is expected to be available in 2023 and that could open a new revenue stream for Tesla Inc.

A big win in form of recent legislation

Tesla is coming out to be the big winner from the passage of the Inflation Reduction Act. The new law has many incentives for renewable energy initiatives, but most importantly, it resets the clock for the tax credit for Tesla buyers. Under the new law, Tesla buyers will get the chance to get a credit of $7,500 from the beginning of 2023.

Although Tesla products are already in great demand, tax incentives could further boost the demand in 2023, which is a big plus for Tesla.

Tesla Stock Price Prediction for the next 12 months

Average TSLA Stock Forecast for the next 12 Months $311
Goldman Sachs $305
Wells Fargo $230
Evercore $300
Morgan Stanley $350
Mizuho $370

Tesla Stock Predictions for the next five years

Tesla Stock Prediction 2023 $494
Tesla Stock Prediction 2024 $693
Tesla Stock Prediction 2025 $1075

TSLA Stock Forecast: Is Tesla a good stock to buy?

Yes, Tesla is a good stock to buy. Here is what is going in favor of Tesla

  1. Outstanding R&D and Execution capability. The company has delivered numerous innovations and has produced its way around chip shortages quite efficiently. Tesla managed Chip shortages by replacing the chips with substitutes and rewriting its firmware. This enabled Tesla to manage production way more efficiently than most Manufacturers.
  2. Twitter Inc is just a legal case and won’t hog Musk’s time: While there was a legitimate concern around how much time Musk would give Twitter, with him pulling out of the deal, Musk’s attention will not be divided away from Tesla and SpaceX
  3. With the stock split, TSLA is much more liquid now and available at a lower price (if not value). It has strong institutional support as well.
  4. EV as a sector will continue to grow and Tesla will be a huge beneficiary.

Here are other specific Positive and negative factors

Positive Factors

  • Starlink Project: For the past many years, Elon Musk has been working on the Starlink project with the intention of providing internet to the remotest space on earth by a network of private satellites in the orbit. It picked up pace in 2021, and Starlink now has more than 2000 satellites to boost. Musk Tweeted that TSLA shareholders may benefit from the Starlink IPO.
  • China: China is a huge market for Tesla and EVs in general, and according to estimates, China will represent 40% of deliveries for the EV maker in 2022, contributing nearly $400 to its share price. If China’s market is handled properly, it could be a big tailwind for Tesla.
  • Gigafactories in Berlin and Austin: The new gigafactories in Berlin and Austin in 2022 will provide a big boost to production.

Negative Factors

  • Interest rates and other economic factors: The Fed has twice increased rates even as there are no signs of the global economy recovering soon. While US inflation may continue to fall, an escalation in Ukraine could pose a huge risk to Global economies.
  • Competition: While Tesla is the undisputed leader of the EV market in the world, a range of competitors are lined up to take a bite out of Tesla. Ford, NIO, LUCID, and VIVIAN to name a few.
  • Regulations, fees, and fines: Lately, Tesla has not been a darling of regulators, and heading into 2022, it could mean trouble for Automaker. There may be various fines and fees involved and potential scrutiny in the expansion plans of Tesla, as China’s plan is not liked by many in the US and increased regulatory scrutiny affects the cash flow and production efficiency, to say the least

Tesla Q3 Deliveries

  • Total Deliveries 343,830 units, below Wall Street Estimates
  • Production was 365,923 units.

Tesla Share Price Forecast: Q2 Results

  • Total deliveries are up 27%, Model S/X deliveries are up 753%, Model 3/Y deliveries are up 20%
  • Q1 Revenue is up 42%, and regulatory credits are down 3%
  • Q1 revenue excluding regulatory credits is up 43%
  • Adjusted EBITA is up 52%, Adjusted EBITA margin is up 159bp
  • Free Cashflow is up 0%

Tesla Stock Forecast Today

Overall Outlook Negative
1. Market’s Wisdom Neutral
1a. Market Data Neutral
1b. Technical Recommendation Neutral
2. Crowd’s Wisdom Negative
2a. Social Media Buzz Lower
2b. Social Media Sentiment Lower

Tesla Stock Forecast 2023: Recap of 2022

2022 has not been a great year for Tesla Inc. The stock has lost nearly half of its value this year. It has been a challenging year for highly valued growth stocks. The story is similar for Shopify Inc and many other such stocks. But there were a couple of positives for Tesla in 2022.

  • A stock split in the ratio of 3 for 1 to make the share price affordable to small investors and broaden the investor base
  • Opening a Gigafactory in Berlin.

Tesla Stock Forecast 2023: Should you buy Tesla Stock?

Tesla has underperformed in 2022, with share price being about 46% lower since the start of the year. The main reason is Tesla shares are “expensive” in this high-inflation market. There were also issues in the supply chain, increasing production costs and below-par deliveries.

But a significant reason is also undelivered promises from CEO Elon Musk. A lot of promises are again made for 2023, and it will be again a test for the CEO to live up to the expectations. But Tesla is still not on the buy list for 2023, simply because it is overvalued and with a concrete future as long as Elon Musk does not lead from the front.

Please do your own research before any investment decision.

Tesla Stock Forecast 2023: Will TSLA return to Glory?

Note: Crowdwisdom360 collates Predictions and data from all over the net and has no in-house view on the likely trends in the Stocks or Crypto Coins. Please consult a registered investment advisor to guide you on your financial decisions.

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