My Positive Outlook On Tesla Stock Paid Off, But It's Overvalued Now
Summary
- Tesla's stock surged 50% since my last article, mainly due to optimism around the upcoming robotaxi launch and Elon Musk's refocused leadership.
- Despite the rally, Tesla's core fundamentals remain weak: sales, deliveries, and net income have all declined, and free cash flow is shrinking.
- The company remains nearly debt-free, but its cash reserves are modest relative to its $1 trillion market cap and ongoing cash burn is a concern.
- Given deteriorating fundamentals and high valuation ratios, I believe TSLA stock is overvalued despite its perceived innovation potential.
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