Tesla shares suffer worst year ever – and 2023 looks bad, too

Yet when it comes to valuation, Tesla is still the fourth-most expensive stock on the NYSE FANG+ Index, trading at a forward multiple of 33 times estimated 2022 earnings.

Worth $440B

The company is worth almost $440 billion, far bigger than any other major global carmaker. Toyota, the second-biggest, is valued at about half that. Toyota is estimated to sell 8.9 million cars in fiscal 2023, ending March 31, while Tesla deliveries for calendar 2022 are expected to be around 1.3 million vehicles, data compiled by Bloomberg show. Granted, the bulls point to Tesla’s much fatter margins.

“Tesla is still trading like a tech company, as a high-growth company, whereas other auto manufacturers are not,” said Shelton’s Kahn. “The valuation still looks rich, because people think the EV complex will grow exponentially and Tesla will be one of the major players in it.”

To some, it all suggests there’s room for the stock to fall further. Momentum certainly isn’t on Tesla’s side. No development has managed to buoy the shares for long in 2022, from the decision to split the stock or dangling the possibility of a share buyback.

Musk’s Twitter poll about stepping down as CEO of that company also failed to stem the slide. And his subsequent confirmation on Tuesday that he will indeed resign from the position hasn’t sparked any major relief rally.

It’s a time of reckoning for Tesla investors, many of whom see Musk’s ability to drive the company to success as forming the foundation for its potential. That partly explains why in a year when Tesla’s earnings are expected to grow more than 80 percent and revenue to expand nearly 55 percent, the dive in the shares has been so deep.

“From a brand perspective, Elon Musk is Tesla and Tesla is Elon Musk,” said Robert Schein, chief investment officer at BlankeSchein Wealth Management, which owns Tesla shares. “The more Elon uses Twitter in a political manner, the more he is potentially tarnishing the Tesla brand.”

Schein, who expects the company to be a leading EV player in the long-term, is waiting for the stock to fall further to add shares.

“If Tesla falls 15 percent to 20 percent from here, we are buying,” he said.