TLDR
- Tesla stock fell 6.6% to $401.99 on Thursday with trading volume up 17% above average at 117.6 million shares
- The stock holds a “Hold” consensus rating with an average price target of $391.08, below current trading levels
- Cathie Wood’s ARK Invest sold Tesla shares for four consecutive sessions through November 13, despite the fund maintaining bullish long-term projections
- Tesla beat Q3 earnings expectations with $0.50 EPS versus $0.48 estimated and revenue of $28.10 billion versus $24.98 billion expected
- The stock trades at a high valuation with a market cap of $1.34 trillion and a price-to-earnings ratio of 268
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Tesla stock dropped 6.6% during Thursday’s trading session, falling from a previous close of $430.60 to $401.99. The decline came on heavy volume of approximately 117.6 million shares, representing a 17% increase over the typical daily average of 100.6 million shares.
Tesla, Inc., TSLA
The electric vehicle maker now trades roughly 12% below its 52-week high of $488.54. The stock has fluctuated within a broad range between $214.25 and $488.54 over the past year.
Tesla’s technical position shows the stock hovering above its 200-day moving average of $338.25, maintaining its longer-term upward structure. However, short-term momentum has stalled near the 50-day moving average of $425.40.
Analysts remain divided on Tesla’s prospects. The stock currently carries a consensus rating of “Hold” with an average price target of $391.08. Ratings range from TD Cowen’s “Buy” rating with a $509 price target to Guggenheim’s “Sell” rating with a $175 target.
William Blair maintained a “Market Perform” rating in September. DBS Bank upgraded Tesla to a “Hold” rating on November 5. The analyst community includes one Strong Buy rating, 21 Buy ratings, 13 Hold ratings, and 10 Sell ratings.
Earnings Beat Expectations Despite Margin Pressure
Tesla reported third-quarter earnings on October 23 that exceeded Wall Street estimates. The company posted earnings per share of $0.50, beating the consensus estimate of $0.48 by two cents.
Revenue reached $28.10 billion for the quarter, surpassing analyst expectations of $24.98 billion. This represented an 11.6% increase compared to the same quarter last year. However, the company’s net margin stood at 5.51% with a return on equity of 6.61%.
The earnings report revealed ongoing margin compression stemming from price cuts implemented to maintain sales volume. Rising operating expenses, particularly in research and development, have added pressure to profitability metrics.
Tesla’s valuation metrics remain elevated with a price-to-earnings ratio of 267.99 and a PEG ratio of 16.84. The company maintains a market capitalization of $1.34 trillion.
ARK Invest Reduces Position After Four Consecutive Sessions
Cathie Wood’s ARK Invest sold Tesla shares for four straight trading sessions through November 13. This extended selling period marks a departure from the fund’s typical activity, despite Tesla remaining ARK’s largest holding.
Tesla accounts for 11.96% of the ARK Innovation ETF (ARKK) and 9.69% of the ARK Next Generation Internet ETF (ARKW). ARK has publicly stated long-term price targets exceeding $2,600 by 2029, making the recent selling activity particularly noteworthy.
The reduction suggests either tactical profit-taking or concerns about near-term performance. This comes as Tesla faces increasing competition in the global electric vehicle market, especially from Chinese manufacturers.
Insider activity has also reflected some selling pressure. CFO Vaibhav Taneja sold 2,606 shares on September 8 at an average price of $352.38 for a total transaction of $918,302. Director James R. Murdoch sold 120,000 shares on August 26 at an average price of $350.29.
Over the past three months, company insiders sold 202,606 shares worth $75.6 million. Insiders currently own 19.90% of the company’s stock.
Institutional investors have made mixed moves on Tesla. Zuckerman Investment Group raised its stake by 6.9% in the first quarter to 12,748 shares valued at $3.3 million. Police & Firemen’s Retirement System of New Jersey increased its position by 5.6% in the second quarter.
Key support levels sit between $425 and $400. The $425 level aligns with the 50-day moving average and represents the lower boundary of recent trading. A break below $400 could signal deeper selling toward $365-$350.
Resistance stands near $470, which has rejected price advances multiple times in the fourth quarter. Analysts forecast Tesla will post 2.56 earnings per share for the current fiscal year.
The stock’s current technical setup shows consolidation above $400, with traders watching the $425 level closely. Hedge funds and institutional investors own 66.20% of Tesla’s stock.
