When selling pressure failed to send Tesla (TSLA) below around $108, it created a great setup for the stock. The share price nearly doubled in 2023, heading toward $200 before stalling.
Should traders FOMO (fear of missing out) from here? At a forward price-to-earnings ratio of 52.2 times and a short float of only 3.37%, TSLA stock is at an inflection point.
Stunned bears would have closed their option and puts that bet against the run-up. Conversely, the moving averages on the chart suggest a pause in Tesla’s momentum.
Tesla’s fundamentals are stronger than before. Sales weakened temporarily in Dec. 2022. The price cut reinvigorated demand. The lower price point encouraged customers to consider a Tesla electric vehicle over the competition.
Rivian (RIVN) faces severe headwinds once Tesla launches the cybertruck. Rivian is not producing vehicles and achieving economies of scale. Tesla has the optimized supply chain and Giga factories worldwide to scale.
In the automotive segment, Lucid (LCID) must sustain a booking backlog of buyers. Once it runs out, Lucid needs to fill its bookings with customers for the mid-tier model. Telsa’s vehicles are at a lower price point, which erodes demand for Lucid vehicles.
Tesla will earn around $6.00 a share in 2023. In 2024, the higher demand plus the cybertruck will push the EPS within the $10 to $14 EPS range.
