Tesla (TSLA) Stock Down 17% in A Month: Is it a Buy Right Now?

TLDR:

• Tesla stock has dropped 17% in the past month and is trading 28% below its December 2023 peak, despite a strong January start
• CFRA Research analyst Garrett Nelson remains bullish on Tesla, estimating a $5 trillion market opportunity in autonomous driving
• Tesla plans to launch robotaxi services in Austin by June 2025, with expansion to other U.S. cities planned by year-end
• Q4 2024 results showed revenue of $25.71 billion (up 2.1% YoY) but missed analyst estimates across most segments
• Investor concerns are growing about Elon Musk’s multiple roles and recent bid for OpenAI, reminiscent of the Twitter acquisition impact

Tesla’s stock has dropped 17% over the past month despite starting 2025 with strong momentum. The electric vehicle maker’s shares, which gained 12% in the first two weeks of January, are now trading 28% below their 52-week high set in December 2024.

The company’s fourth-quarter results, released on January 29, showed mixed performance. Tesla reported revenue of $25.71 billion, representing a 2.1% increase year-over-year, but fell short of analysts’ expectations of $27.5 billion. Automotive revenue came in at $19.8 billion, missing estimates of $21.41 billion.

Tesla’s energy division generated revenue of $3.06 billion, slightly below the anticipated $3.13 billion, while services revenue exceeded expectations at $2.85 billion compared to projected $2.81 billion. The company’s operating margin decreased to 6.2% from 8.2% in the same quarter last year.

The electric vehicle manufacturer ended the year with a strengthened cash position of $36.56 billion, up from $29 billion in 2023. Free cash flow for the quarter reached $2.03 billion, showing a slight decrease from $2.06 billion in Q4 2023.

CFRA Research analyst Garrett Nelson maintains an optimistic outlook on Tesla’s future, particularly regarding its autonomous driving initiatives. Nelson estimates the global autonomous driving market opportunity to be worth over $5 trillion and believes Tesla’s stock is currently trading at a fraction of its potential value.

Robotaxis

Tesla has announced plans to launch unsupervised robotaxi services in Austin by June 2025. During the company’s Full Year and Q4 2024 Earnings Call, CEO Elon Musk stated that these services would expand to multiple U.S. cities by the end of the year. Morgan Stanley analysts support this vision, forecasting an $800 bull case scenario based on the robotaxi business potential.

However, not all analysts share this optimistic view. Gary Black predicts limited participation in the robotaxi fleet, suggesting that less than 50% of Tesla owners would be willing to include their personal vehicles in a public fleet.

Recent investor concerns have centered on Elon Musk’s increasing commitments outside of Tesla. Besides his role as Tesla CEO, Musk heads several other companies including SpaceX, xAI, Neuralink, and now serves as the head of the Department of Government Efficiency (DOGE).

Adding to these concerns, Musk recently made an unsolicited bid worth approximately $97 billion for the nonprofit controlling OpenAI. The offer was promptly rejected by OpenAI CEO Sam Altman. This move has drawn parallels to Musk’s 2022 Twitter acquisition, which coincided with a 33% decline in Tesla’s stock price.

Oppenheimer Analyst Colin Rusch has labeled the OpenAI bid as a “distraction” and maintained a “Hold” rating on Tesla stock. The company currently has mixed analyst recommendations, with 13 “Strong Buy” ratings, 2 “Moderate Buy” ratings, 14 “Hold” ratings, and 10 “Strong Sell” ratings among 39 analysts covering the stock.