Tesla (TSLA) Is a “Cult-Like” Investment, Says $4B Fund

Electric vehicle maker Tesla (TSLA) was described as a “cult-like” investment in Delaware Ivy Core Equity Fund’s (ICIEX) Q3 2024 investor letter. The mutual fund, which manages close to $4 billion, highlighted Tesla’s heavy reliance on speculative developments in autonomous driving technology. While the fund doesn’t own Tesla shares, it believes that the company’s fundamentals are underwhelming relative to the current share price, and it is not the only one.

Indeed, analysts are also growing concerned about its valuation due to its reliance on unproven future technologies, as well as the disconnect between its soaring stock price and its current financial fundamentals. In addition, according to TipRanks’ Bulls Say, Bears Say tool, some bearish analysts even point to non-fundamental factors such as options market manipulation as a reason for its recent rally. It also does not help that Chinese competitors are making it very difficult for Tesla to compete in China due to their high-quality and lower-priced vehicles that are favored by the local population.

Nevertheless, Tesla remains appealing among investors, as 11.4% of the portfolios tracked by TipRanks include Tesla as part of their holdings. More importantly, the average weighting in these portfolios is over 14%, which suggests that investors are very confident about its future.

Is Tesla Stock a Buy, Hold, or Sell?

Turning to Wall Street, analysts have a Hold consensus rating on TSLA stock based on 13 Buys, 12 Holds, and nine Sells assigned in the past three months, as indicated by the graphic below. After a 71% rally in its share price over the past year, the average Tesla price target of $294.30 per share implies 32.8% downside risk.

See more TSLA analyst ratings