Should You Buy, Sell, or Hold Tesla Stock?
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Sep 21 2025
0mins
Should l Buy TSLA?
Source: Fool
Tesla's Stock Performance: Tesla shares have experienced a significant increase of 2,300% over the past decade, driven by the company's innovative electric vehicle (EV) offerings, but the stock is currently seen as overvalued with a high price-to-earnings (P/E) ratio of 246.
Challenges and Future Prospects: The company faces declining automotive revenue and increased competition, leading to skepticism about its future growth, despite some investors betting on new ventures like the Robotaxi business and humanoid robots to drive sales and earnings in the long term.
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Analyst Views on TSLA
Wall Street analysts forecast TSLA stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for TSLA is 401.93 USD with a low forecast of 25.28 USD and a high forecast of 600.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
30 Analyst Rating
12 Buy
11 Hold
7 Sell
Hold
Current: 428.270
Low
25.28
Averages
401.93
High
600.00
Current: 428.270
Low
25.28
Averages
401.93
High
600.00
About TSLA
Tesla, Inc. designs, develops, manufactures, sells and leases high-performance fully electric vehicles and energy generation and storage systems, and offers services related to its products. Its segments include automotive, and energy generation and storage. The automotive segment includes the design, development, manufacturing, sales and leasing of high-performance fully electric vehicles, and sales of automotive regulatory credits. It also includes sales of used vehicles, non-warranty maintenance services and collisions, part sales, paid supercharging, insurance services revenue and retail merchandise sales. The energy generation and storage segment include the design, manufacture, installation, sales and leasing of solar energy generation and energy storage products and related services and sales of solar energy systems incentives. Its consumer vehicles include the Model 3, Y, S, X and Cybertruck. Its lithium-ion battery energy storage products include Powerwall and Megapack.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Margin Improvement: Tesla's gross margin increased from 15.4% in Q3 to 17.9% in Q4, despite launching lower-priced Model 3 and Model Y versions, showcasing successful cost management and product optimization that may enhance future profitability.
- Capital Expenditure Plans: Tesla anticipates capital expenditures exceeding $20 billion in 2026, a substantial increase from $8.5 billion in 2025, aimed at starting production at new factories and advancing technology development, reflecting the company's ambitious growth strategy.
- Market Competition Pressure: While Tesla experienced sales growth in the Asia-Pacific region, the company warned of potential margin compression across all business segments, indicating the need for continuous innovation to maintain its market leadership amid intense competition.
See More
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- Portfolio Dominance: The combined entity dominates the ARK fund, significantly exceeding other holdings like Figure AI (4.24%) and Databricks (3.55%), providing investors with a stronger concentrated investment opportunity in the AI and aerospace sectors.
- Future IPO Outlook: SpaceX is reportedly preparing for a potential IPO later this year that could see its valuation exceed $1.5 trillion, and this merger consolidates high-conviction exposure for ARK investors, further solidifying its leadership in emerging markets.
See More
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- Strategic Partnerships: The company has partnered with UK tech firm Humanoid to integrate several hundred humanoids into its production network over the next five years, aiming to generate over €3 billion in sales from humanoid robotics, defense, and electric vertical take-off sectors by 2035.
- Unique Market Positioning: Although humanoids account for less than 1% of Schaeffler's sales, its positioning in this niche market makes it one of the few investment opportunities in humanoid robotics in Europe, attracting significant investor interest despite ongoing challenges in its traditional auto business.
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See More
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- Wholesale Volume Increase: Total wholesale volume, including domestic sales and exports, reached 69,129 units, up 9.3% year-over-year, although it fell nearly 29% from December, indicating volatility in market demand.
- Retail Sales Decline: Tesla's retail sales in January stood at 18,485 vehicles, the lowest since November 2022, reflecting a 45% drop year-over-year and over 80% plunge from December 2025, highlighting the challenges in the market environment.
- Increased Market Pressure: While Tesla holds a 3.1% share of the NEV market in China, policy changes and intensified competition have suppressed demand, with registrations in France and Norway dropping 42% and 88% respectively in January.
See More
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- Active Debt Market: Companies like Alphabet and Oracle have significantly increased their debt sales, with Alphabet recently raising its bond offering to over $30 billion, indicating strong financing needs that may heighten concerns about an AI bubble.
- Lackluster IPO Outlook: Despite excitement around IPOs for companies like SpaceX, the activity for U.S. tech IPOs remains low in 2023, with only 120 expected, raising $160 billion, which is far below the 121 deals completed in 2021.
- Rising Financing Costs: As debt supply increases, investors are demanding higher yields from other companies, leading to an overall rise in financing costs, which could negatively impact companies reliant on debt in the long term.
See More
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- Unemployment Rate Decline: The unemployment rate fell to 4.3% in January, the lowest since August, reflecting improvements in the labor market, despite revisions showing that payroll gains from April 2024 to March 2025 were 898,000 lower than initially reported.
- Surge in Tariff Revenue: The U.S. generated $30 billion in tariff revenue in January, a more than 300% year-over-year increase, which helps alleviate federal budget deficit pressures; however, the House passed a resolution to repeal Trump's tariffs, likely facing a Senate veto.
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