Tesla Inc (TSLA) Enters 2018 Overvalued, Based On Actual Business Progress

Tesla Inc (NASDAQ:TSLA) shares surged in 2017, despite the company failing to meet many of its ambitious goals, but Wall Street’s patience could be running out soon.

Considering a lack of Model 3 production, slower than expected progress in its Autopilot self-driving system, extremely high debt load, major cash burn, and sluggish performance in its solar business, signs are mounting that Tesla could be in for a less-than-stellar year, performance-wise.

The Verge notes that while hope lies on the horizon as well, the company is entering “put up or shut up” territory:

Tesla’s 2018 has potential to be much brighter than 2017. There are likely to be more announcements and new promises from Musk and the company. But what would make next year a good one for Tesla would be if the company keeps the promises made in 2016 and 2017.
Getting the Model 3 production up to full speed, while showing it can grow past some of the quality issues with its cars, is priority number one. Fixing the problems that have resulted in labor disputes and lawsuits is also key, as there has never been more EV startups waiting to poach good talent (both here and abroad). Last year, we said it seemed Tesla was finally growing out of youthful startup mode and into adulthood. 2017 proved the company still has a ways to go to reach maturity.

Of course, what this year will bring for Tesla is anyone’s guess. But the era of unlimited free passes for Elon Musk’s company could finally end this year, meaning that fundamentals could take center stage — and that would be a very unwelcome development for shareholders.

Tesla Inc shares fell $0.36 (-0.12%) in premarket trading Tuesday. Year-to-date, TSLA has declined 0.00%, versus a 0.00% rise in the benchmark S&P 500 index during the same period.

TSLA currently has a StockNews.com POWR Rating of C (Neutral), and is ranked #19 of 24 stocks in the Auto & Vehicle Manufacturers category.

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