Shares of Tesla fell more than 5% in trading on Friday to close at $235.14, their lowest level since January 2017.
The stock ended the brutal week down more than 12% after an investor day that focused on autonomy and failed to excite Wall Street analysts was followed by an earnings report that missed expectations on both the top and bottom lines.
Foto: sourceMarkets Insider
One analyst, Daniel Ives of Wedbush, said he could no longer in good faith recommend the stock to clients.
“To this point, in our 20 years of covering tech stocks on the Street we view this quarter as one of top debacles we have ever seen while Musk & Co. in an episode out of the Twilight Zone act as if demand and profitability will magically return to the Tesla story,” Ives and his fellow analyst Strecker Backe said in a note on Thursday.
“As such, we no longer can look investors in the eye and recommend buying this stock at current levels until Tesla starts to take its medicine and focus on reality around demand issues which is the core focus of investors,” they added.
Wall Street analysts polled by Bloomberg have an average price target of $296 for Tesla – about 26% higher than Friday’s close. Twelve of those analysts recommend buying the stock, with nine rating it neutrally and 15 rating it a sell.
“We remain encouraged by Tesla’s vision and future growth prospects (brand value, global Model 3 and Y TAM, Semi, etc.), but there is increased uncertainty around near-term demand vs previous bullish forecasts and growth cannot stall for a growth company,” Evercore ISI analysts led by Arndt Ellinghorst wrote in a note to clients on Monday.
The firm knocked Tesla down to an “underperform” rating from “in-line.”
CEO Elon Musk, meanwhile, is still involved in a lengthy tussle with federal stock regulators. On Thursday, Musk and the Securities and Exchange Commission asked a judge for another one-week extension for their ongoing talks about Musk’s twitter use.
Rebecca Ungarino contributed to this report.