A prominent one Tesla Inc. TSLA Bear has issued a dire warning about the company’s future.
What happened: For Lekandera hedge fund manager who has been selling Tesla since 2020 has predicted that the electric vehicle (EV) maker could “fail,” with its shares potentially plunging to $14, CNBC reported.
Lekander’s comments come after Tesla’s first-quarter vehicle deliveries fell significantly short of market estimates.
Lekander, the managing partner of the investment management company Transition to clean energydescribed the first quarter results as “the beginning of the end of the Tesla bubble.”
“I actually think the company could go bankrupt,” he said.
He suggested that the company’s business model, which relies on strong revenue growth, vertical integration and direct-to-consumer sales, could falter if sales decline.
He said his rating is rooted in a projection of the company’s full-year earnings per share for this year at $1.40.
Lekander argues that Tesla should be considered a “no-growth” stock valued at 10 times future earnings, compared to its current valuation of about 58 times future earnings. Future earnings are a crucial metric used by traders to evaluate the value of a stock.
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He also stressed that Tesla’s problems in the first quarter were not due solely to supply chain disruptions, as the company claimed, but rather a “demand issue.”
Lekander expressed skepticism about the company’s future, especially because its two main models, the Model 3 and Model Y, won’t be updated until 2025.
“I don’t see any reason to see a recovery in the next two years, given that these models are outdated and given that the economy is not accelerating,” Lekander said.
Because matter: Lekander’s comments come as Tesla faces a number of challenges. The company’s first-quarter delivery numbers were disappointing. This prompted analysts to change their forecasts, and some even questioned Tesla’s valuation.
However, not everyone shares Lekander’s pessimism. Cathie Woodthe CEO of Ark Investinghas been buying Tesla shares on the back of recent weakness, expecting the stock to reach $2,000 per share in the next few years. Tom Narayananalyst at RBC Capital Markets, also believes that Tesla’s energy storage business represents a significant opportunity for the company.
Price action: Tesla closed the day at $168.38, up 1.05%. In after-hours trading, the stock rose to $169.99, showing a further gain of 0.96% on Wednesday. Over the past six months, Tesla has seen a notable decline of 35.53%, according to data from Benzinga Pro.
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