Tesla’s Stock Price Looks to Test $250 as Pre-Market Selloff Continues

Tesla's stock (NASDAQ: TSLA) is trading down a further 4.39% during this morning's pre-market, following a sell-off that has seen the stock price fall 30% through the first quarter of the year.

Perhaps most concerning for technically-minded investors, a re-test of the 200MA last week was firmly rejected, with Tesla now trading significantly below its critical 200-day simple moving average (SMA) of $286. This long-term trend indicator is often viewed as a crucial line of support or resistance, and a sustained break below it can signal a potential shift in the stock's longer-term trajectory.

This recent slump extends a period of notable weakness for the high-profile automaker. This short-to-medium term underperformance stands in stark contrast to the stock's powerful run over the past year, where it still boasts gains of 50%. Volatility is the word of the day, as the 1 year chart below can demonstrate better than 1,000 words.

Adding fuel to the cautious sentiment are darkening clouds around expectations for Tesla's first-quarter 2025 financial results, anticipated around April 22nd. Following a mixed Q4 2024 report where the company notably missed revenue expectations ($25.71B actual vs. $27.26B estimate), despite delivering an earnings per share (EPS) figure ($0.66-$0.73) that straddled analyst forecasts depending on the estimate used, Wall Street seems to be bracing for a softer Q1.

Consensus EPS estimates for the upcoming quarter have recently been revised downward, now centering in the $0.49 to $0.53 range. Similarly, revenue forecasts have also been trimmed, now projected between $22.95 billion and $23.03 billion.

This downward drift in expectations suggests analysts are factoring in potential headwinds. These range from intensifying competition in key markets like China and Europe (where recent market share data has been falling), potential impacts from global macroeconomic pressures on consumer discretionary spending, ongoing pricing adjustments affecting margins, or potentially moderating delivery growth rates. Recent discussions surrounding US auto tariffs are also contributing to the uncertainty.

🟩 The Bull Case for TSLA

• EV Leadership: Belief that Tesla's technological edge, brand power, and charging infrastructure provide a durable competitive advantage in the ongoing shift to electrification.
• Untapped Growth Avenues: Potential upside from Cybertruck, Semi, advancements in Full Self-Driving (FSD), robotics (Optimus), and expansion of the Energy business.
• Proven Execution Track Record: Despite bumps, Tesla has historically scaled production and innovated faster than many legacy competitors.
• Strong Long-Term Vision: Investors buy into the Elon Musk narrative of disrupting multiple industries beyond just automotive.

🟥 The Bear Case for TSLA

• Weakening Technicals: Breach of key moving averages (50-day, 200-day) signals potential for further downside momentum.
• Slowing Growth & Margin Pressure: Q4 revenue miss and lowered Q1 estimates point to potential deceleration and impact from price cuts/competition.
• Intensifying Competition: Legacy auto giants and EV startups are flooding the market with new models, challenging Tesla's dominance.
• Valuation Concerns: Stock still trades at a high multiple compared to traditional automakers, potentially vulnerable in a risk-off environment or if growth falters.
• Execution & Key Person Risk: Reliance on Elon Musk, potential distractions, and challenges in scaling new products (Cybertruck) pose risks.

The path forward appears increasingly debated among analysts, reflected in an exceptionally wide range of price targets, stretching from a deeply bearish $120 to a highly optimistic $1000 per share. This gap underscores the fundamental disagreement about Tesla's valuation and its ability to sustain premium multiples.

As Tesla navigates this complex environment, investors will be keenly awaiting upcoming delivery figures for Q1 and, more critically, the full earnings report and subsequent management guidance in late April.