Should you acquire Tesla (USA Stocks:TSLA) based on current technical indicators?

All eyes are on Tesla as February approaches, with investors keenly watching whether the stock will bounce back or continue its downward trend. Tesla, a heavyweight in the consumer cyclical sector, has been a focal point in the automobile industry, boasting a market value of $397.15 billion. Despite its impressive valuation, the stock's technical indicators present a mixed picture. The 50-day moving average stands at $393.55, significantly above the 200-day moving average of $258.68, suggesting a recent upward momentum. However, the period momentum indicator at -9.43 hints at potential challenges ahead. Analysts remain optimistic, with a consensus rating of 'Buy' and target prices ranging from $270.01 to $329.35. As the market navigates through these signals, the question remains: will Tesla's stock find its footing or face further volatility in the coming month? As more millennials show interest in the automotive sector, it's worth examining Tesla Inc in light of current economic trends. Recently, Tesla has faced a downturn as investors grow more cautious amid rising sector volatility. Over the past few months, Tesla's performance has shown some correlation with broader market trends. Additionally, weak fundamental indicators could hint at potential long-term challenges for Tesla investors. The company is set to release its earnings report tomorrow, which could provide further insights into its financial health.
Published over three weeks ago
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Reviewed by Rifka Kats

Tesla's stock has an average "Buy" rating from 48 analysts. But what drives this consensus? Analysts often use technical analysis, which involves studying price momentum, patterns, and trends based on historical data. This approach helps gauge market sentiment and investors' expectations for Tesla's future value. Let's delve into some technical aspects of Tesla. The company has a Profit Margin of 0.13%, indicating that even a slight drop in revenue could lead to losses. This margin is notably low. Additionally, Tesla's Operating Margin stands at 0.11%, meaning it earns just $0.11 in operating income for every $100 in sales. These figures highlight the company's tight profit margins, which could be a concern for investors.

Main Takeaways

Tesla's stock, currently priced at 397.15, has shown a price percent change of -2.32, indicating a slight downward trend. With a Beta of 2.295, the stock is quite volatile, suggesting that investors should be prepared for potential swings in either direction as February unfolds.
Using predictive technical analysis, we can analyze different prices and returns patterns and diagnose historical swings to determine the real value of Tesla Inc. In general, sophisticated investors focus on analyzing Tesla stock price patterns and their correlations with different microeconomic environment and drivers. They apply predictive analytics to build Tesla's daily price indicators and compare them against related drivers such as momentum indicators and various other types of predictive indicators. Using this methodology combined with a more conventional technical analysis and fundamental analysis, we attempt to find the most accurate representation of Tesla's intrinsic value. In addition to deriving basic predictive indicators for Tesla, many experienced traders also check how macroeconomic factors affect Tesla price patterns. Please read more on our technical analysis page or use our predictive modules below to complement your research.

How does Tesla Stands against Peers?

Analyzing Tesla competition or peers my help you to expand the diversification possibilities of your existing portfolios and to get a better perspective on locking in new positions. Try to analyze the advantages of investing in traded instruments related to Tesla across multiple sectors and thematic ideas. A good competitive analysis can cover a lot of different areas. But what areas to choose depends on who you are. The more exhaustive you are in your analysis, the more effective your competitive analysis will be. Check out Tesla Competition Details

Tesla Gross Profit

Tesla Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Tesla previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Tesla Gross Profit growth over the last 10 years. Please check Tesla's gross profit and other fundamental indicators for more details.

Closer look at Tesla Downside Variance

Tesla Inc has current Downside Variance of 10.12. Downside Variance (or DV) is measured by target semi-variance and is termed downside volatility. It is expressed in percentages and therefore allows for rankings in the same way as variance. One way to view downside volatility is the annualized variance of returns below the target.
Downside Variance is the probability-weighted squared below-target returns.
The squaring of the below-target returns has the effect of penalizing failures at an exponential rate. This is consistent with observations made on the behavior of individual decision-making under.

Downside Variance

 = 

SUM(RET DEV)2

N(ER)

 = 
10.12
SUM = Summation notation
RET DEV = Actual returns deviation over selected period
N(ER) = Number of points with returns less than expected return for the period
Let's now compare Tesla Downside Variance to its closest peers:
TSLA
XPEV
RIVN
LCID
TSLA10.123902698364603
XPEV17.09
RIVN21.18
LCID19.38
"Buy low, sell high" is a mantra that resonates with every investor, and Tesla's current technical indicators might just offer a clue on whether it's time to act. As of now, Tesla's stock is trading below its 50-day moving average of 393.55, suggesting potential downward pressure. However, with a robust market capitalization of $1.28 trillion and a relatively low debt-to-equity ratio of 0.14%, the company maintains a strong financial footing. The high beta of 2.3 indicates that Tesla's stock is more volatile than the market, which could mean significant price swings in February. Investors should weigh these factors carefully to decide if Tesla will rebound or retreat in the coming weeks..

Another setback for Tesla investors

Tesla investors are encountering a new challenge as the stock's Sortino ratio has dropped to 0.29, hinting at possible instability. This ratio, which assesses risk-adjusted returns with a focus on downside volatility, indicates that Tesla's recent performance hasn't been favorable when accounting for potential losses. A low Sortino ratio suggests the stock might be more susceptible to market swings, making investors cautious about future volatility. Tesla's stock exhibits above-average downside volatility over the chosen period. Recognizing market volatility trends can help investors make informed decisions. By using volatility indicators, traders can assess Tesla's stock risk relative to market fluctuations in both rising and falling markets. Increased volatility during downturns can affect Tesla's stock price, prompting investors to adjust their portfolios by diversifying as prices decline.

Our Takeaway on Tesla Investment

Whereas few other entities in the auto manufacturers industry are either recovering or due for a correction, Tesla may not be performing as strong as the other in terms of long-term growth potentials. Taking everything into account, as of the 28th of January 2025, our research shows that Tesla is a rather very steady investment opportunity with a very low chance of distress in the next two years. From a slightly different view, the entity currently appears to be overvalued. Our current 90 days recommendation on the company is Strong Sell.

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Editorial Staff

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Aina Ster do not own shares of Tesla Inc. Please refer to our Terms of Use for any information regarding our disclosure principles.

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