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Tesla (TSLA) is in the news for all the wrong reasons. Here is a very brief take from a fundamental and technical perspective only.

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Profitability has obviously taken a big hit:

 5 of last 8 QTR’s showing negative EPS growth by as much as -47%. So much that even with this 50%+ decline in the stock price, the forward PE ratio is still above its 5 yr avg. And 3x the average for the consumer discretionary sector (currently 25.6x).

 The expected EPS growth rate for this year is 12%, which about in line with the market average. But 12% growth on a PE of 87, means your still paying more than 7x its growth rate. Tough sell.

Tesla investors don’t buy the stock for EPS growth though. It’s all about sales growth and its leadership position in AI, robotics, and FSD, batteries, etc.

 But even sales have disappointed:

 Tesla has missed sales estimates in 6 of the last 8 quarters & growth rates have slowed to single digits for the last 6 quarters.

The street is expecting about 10% sales growth in 2025.

 From a fundamental perspective, the only thing the bulls have going for them is the stock is trading at a price to sales (PS) ratio that is roughly a 30% discount to the companies 5 yr average.

So you’re essentially paying less than 1x the company’s expected 2025 sales growth rate. Which is fairly attractive if that means anything to you.

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From a technical perspective, the stock matched the size of its largest drawdown since bottoming in 2022.

 The August 2023 to April 2024 decline took the share price down about 54%.

 And from the December highs of $488 the stock has now fallen an equal amount in % terms, when it hit $227.

So far its been holding. The main difference between then and now is the last pullback took about 10 months, whereas this one took less than 3 months.

Will it be enough to hold? I have no idea. But if it doesn’t, I suspect the next downside targets to be $176 and then around $120 (give or take a few % points of course).

The next obvious hurdle for bulls will be if they can push price back above the 200 day moving average ($284) and the prior swing high pivot ($299).

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