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Tesla’s Stock Defies Fundamentals
JPMorgan is deeply skeptical of Wall Street’s upbeat reaction to Tesla’s earnings.
Kieran Ryan
February 05, 2025
TODAY’S STORY
On Friday, JPMorgan analyst Ryan Brinkman said, “Tesla shares continue to strike us as having become completely divorced from the fundamentals.”
It’s safe to say that JPMorgan is deeply skeptical of Wall Street’s upbeat reaction (up 8% post-earnings at the time of my writing) to Tesla’s earnings after a whopping 53% decline in its 2024 net income compared to the prior year.
This fits into a broader pattern for Tesla’s shares – the company’s financial performance continues to falter, yet analysts’ price targets and the share price keep rising.
For example, Tesla’s Q4 2024 EBIT of $1.58 billion was 38% below the $2.50 billion expected by Wall Street 10 quarters ago.
So why is the share price rising? Investors are buying the dream Elon Musk is selling – one where Tesla’s AI, autonomous vehicle, and robotics ventures transform it into the “most valuable company in the world by far.”
With the Tesla bull and bear arguments diverging further apart, something will eventually have to give.
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Kieran & Justin Ryan
