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Should You Sell Tesla ETFs as Stock Seems to Have Peaked?
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After gaining about 120% this year and rising about 11% in the past three months (as of Sep 12, 2023), electric vehicle giant Tesla (TSLA - Free Report) has reached a point where investors have probably started thinking about whether to sell or hold the stock.Tesla topped a list of the most-shorted large-cap U.S. stocks for the third successive month in August, securities lending data firm Hazeltree said in a report on Tuesday, as quoted on Reuters.
The Tesla stock rallied over 5% on Monday after a Morgan Stanley note suggested that the automaker's Dojo supercomputer could bolster Tesla's market value. But shares started falling on Tuesday on profit booking.
What Is the Consensus Price Target?
Based on short-term price targets offered by 24 analysts, the average price target for Tesla is $242.42. The forecasts range from a low of $85.00 to a high of $350.00. The average price target represents a decline of 11.39% from the last closing price of $273.58 (as of Sep 11, 2023).
Tesla currently has an average brokerage recommendation (ABR) of 2.74 on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated on the actual recommendations (Buy, Hold, Sell etc.) made by 27 brokerage firms. The current ABR compares to an ABR of 2.73 a month ago based on 26 recommendations. This compares with ABR of 1.83 boasted by the industry.
Is Tesla Overvalued?
Tesla has a Price/Earnings (TTM) of 68.39X versus the Industry P/E (TTM) of 10.46X. Price/Book ratio of 16.73X also appears overvalued for Tesla when compared with 1.19X P/B held by the underlying industry. Tesla’s price-to-cash flow is 53.10X versus 7.33X P/CF held by the industry.
What Are Silver Linings?
Tesla is a low-debt company with a debt-equity ratio of 0.02X versus 24.06X ratio held by the industry. The company’s return-on-equity is also praiseworthy at 26.10% compared with a negative 56.06% return-on-equity of the industry.
Should You Offload Tesla?
Tesla’s launch of the Dojo supercomputer will surely be a success as proposed by Morgan Stanley. But the full-fledged arrival of Dojo is unlikely until the end of 2024. Against this backdrop, if you want to offload Tesla, you can bet on inverse Tesla ETFs (read: Tesla's Supercomputer Dojo Propels These ETFs).
The Direxion Daily TSLA Bear 1X Shares seeks daily investment results, before fees and expenses, of 100% of the inverse of the performance of the common shares of Tesla, Inc. The expense ratio of the fund is 1.07%.
The AXS TSLA Bear Daily ETF seeks daily investment results, before fees and expenses, that correspond to the inverse of the daily performance of the common shares of Tesla, Inc. The expense ratio of the fund is 1.15%.
GraniteShares 1x Short TSLA Daily ETF
The underlying GraniteShares 1x Short TSLA Daily ETF seeks daily investment results, before fees and expenses, of -1 times the daily percentage change of the common stock of Tesla Inc. The expense ratio of TSLI is 1.15%.
Bottom Line
For ETF investors who are bearish on Tesla for the near term, either of the above products could make an interesting choice. Clearly, this could be intriguing for those with the belief that the “trend is the friend” in this specific corner of the investing world.
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Should You Sell Tesla ETFs as Stock Seems to Have Peaked?
After gaining about 120% this year and rising about 11% in the past three months (as of Sep 12, 2023), electric vehicle giant Tesla (TSLA - Free Report) has reached a point where investors have probably started thinking about whether to sell or hold the stock.Tesla topped a list of the most-shorted large-cap U.S. stocks for the third successive month in August, securities lending data firm Hazeltree said in a report on Tuesday, as quoted on Reuters.
The Tesla stock rallied over 5% on Monday after a Morgan Stanley note suggested that the automaker's Dojo supercomputer could bolster Tesla's market value. But shares started falling on Tuesday on profit booking.
What Is the Consensus Price Target?
Based on short-term price targets offered by 24 analysts, the average price target for Tesla is $242.42. The forecasts range from a low of $85.00 to a high of $350.00. The average price target represents a decline of 11.39% from the last closing price of $273.58 (as of Sep 11, 2023).
Tesla currently has an average brokerage recommendation (ABR) of 2.74 on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated on the actual recommendations (Buy, Hold, Sell etc.) made by 27 brokerage firms. The current ABR compares to an ABR of 2.73 a month ago based on 26 recommendations. This compares with ABR of 1.83 boasted by the industry.
Is Tesla Overvalued?
Tesla has a Price/Earnings (TTM) of 68.39X versus the Industry P/E (TTM) of 10.46X. Price/Book ratio of 16.73X also appears overvalued for Tesla when compared with 1.19X P/B held by the underlying industry. Tesla’s price-to-cash flow is 53.10X versus 7.33X P/CF held by the industry.
What Are Silver Linings?
Tesla is a low-debt company with a debt-equity ratio of 0.02X versus 24.06X ratio held by the industry. The company’s return-on-equity is also praiseworthy at 26.10% compared with a negative 56.06% return-on-equity of the industry.
Should You Offload Tesla?
Tesla’s launch of the Dojo supercomputer will surely be a success as proposed by Morgan Stanley. But the full-fledged arrival of Dojo is unlikely until the end of 2024. Against this backdrop, if you want to offload Tesla, you can bet on inverse Tesla ETFs (read: Tesla's Supercomputer Dojo Propels These ETFs).
The Direxion Daily TSLA Bear 1X Shares (TSLS - Free Report)
The Direxion Daily TSLA Bear 1X Shares seeks daily investment results, before fees and expenses, of 100% of the inverse of the performance of the common shares of Tesla, Inc. The expense ratio of the fund is 1.07%.
AXS TSLA Bear Daily ETF (TSLQ - Free Report)
The AXS TSLA Bear Daily ETF seeks daily investment results, before fees and expenses, that correspond to the inverse of the daily performance of the common shares of Tesla, Inc. The expense ratio of the fund is 1.15%.
GraniteShares 1x Short TSLA Daily ETF
The underlying GraniteShares 1x Short TSLA Daily ETF seeks daily investment results, before fees and expenses, of -1 times the daily percentage change of the common stock of Tesla Inc. The expense ratio of TSLI is 1.15%.
Bottom Line
For ETF investors who are bearish on Tesla for the near term, either of the above products could make an interesting choice. Clearly, this could be intriguing for those with the belief that the “trend is the friend” in this specific corner of the investing world.