Tesla shares (TLSA) are overvalued and worth $ 150, says analyst


A Tesla logo is displayed during the Brussels Motor Show on January 9, 2020 in Brussels.

Kenzo Tribouillard | AFP | fake images

Tesla shares are overvalued and worth just $ 150, according to Craig Irwin, a senior research analyst at Roth Capital, who said the electric carmaker must do more to justify its share price of nearly $ 700.

Tesla shares closed at $ 691.05 overnight as investors applauded deliveries that beat the electric car maker’s forecasts.

But the possibility of Tesla beating estimates “is clearly already in valuation,” Irwin told CNBC’s “Squawk Box Asia” on Tuesday. The company’s valuation of about $ 660 billion is close to the full size of the US and European auto markets, though it is only a “minor player” overall, the analyst said.

“So to me, I see this as a market dislocation, I see this as something that avoids fundamental analysis and I think there is room for a lot of successful companies in the market. People are just assuming that Tesla has no competition when they put this kind of high-valuation of the company, “Irwin said.

Still, Irwin said he is optimistic about the outlook for electric vehicle sales, in which Tesla is the market leader.

Tesla reported Friday that it delivered 184,800 vehicles and produced 180,338 cars in the first quarter of 2021. Analysts expected the company to deliver about 168,000 vehicles during this period, according to estimates compiled by FactSet as of April 1.

Shares of the company rose as much as 7% on Monday.

Irwin said “good things” are happening for Tesla. He cited an expected entry in India and the outlook in China as factors helping Tesla’s outlook.

But the company needs to do much more to justify its current share price of nearly $ 700, Irwin said.

“They would really have to comply with robotaxis, fully autonomous vehicles,” the analyst said, adding that Tesla appeared to withdraw its efforts in that area, while other companies are coming out with “far superior technology.”

– CNBC’s Lora Kolodny and Katrina Bishop contributed to this report.

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