Keller Grain -

Tesla (TSLA) is officially making its entrance into Saudi Arabia, launching sales later this month. While the electric vehicle (EV) giant has made inroads across the Middle East, the Gulf region’s biggest market has remained untouched — until now. In a country where EVs account for just 1% of total car sales, this marks a pivotal moment.

Tesla’s Riyadh launch event on April 10 will showcase its EVs and solar-powered products. A day later, pop-up stores are expected to open in Riyadh, Jeddah, and Dammam. Investments are already mapped out for 2025 and beyond. With this strategic expansion, the trajectory of TSLA’s stock is worth watching closely.

About Tesla Stock

Based in Austin, Texas, Tesla (TSLA) has become an $833.6 billion powerhouse. Tesla now commands approximately 70% of the U.S. market share for battery-powered electric cars, setting the standard for EV innovation.

But its influence extends far beyond vehicles. The company is a trailblazer in the energy and mobility sectors, with advancements in battery storage, solar energy, and artificial intelligence (AI)-driven autonomous technology.

Over the past 52 weeks, TSLA has skyrocketed by 49%. However, Tesla’s global brand has experienced significant deterioration, due tor rising competition and CEO Elon Musk’s role in President Donald Trump’s administration. Year-to-date, the stock has fallen by 35%, reflecting these challenges.

From a valuation perspective, TSLA trades at 98.13 times forward adjusted earnings and 7.66 times sales, well above the industry averages. However, compared to its own five-year averages, it still represents a rare discount.

Tesla Misses on Q4 Earnings

Tesla’s fourth-quarter 2024 earnings report, released on Jan. 29, missed analysts’ expectations, despite the company achieving a record number of vehicle deliveries. Revenue grew by 2.1% year-over-year, reaching $25.7 billion, but fell short of the Wall Street forecast of $27.1 billion.

During the quarter, Tesla delivered 495,570 vehicles, marking a 2.3% increase compared to the previous year. However, its income from operations dropped by 23.3% to $1.6 billion. Adjusted net income showed resilience, rising 3.3% to $2.6 billion. Adjusted EPS also increased by 2.8% year-over-year to $0.73, but missed analysts' estimate of $0.77.

As Tesla prepares to release its first quarter fiscal 2025 production and delivery figures on April 2, analysts anticipate a decline in deliveries. Wall Street expects around 373,000 vehicles for the quarter, a 3.6% drop from last year’s 386,810. The decline is attributed to a combination of weak demand and backlash against CEO Elon Musk’s politics.

Despite this, the company’s global expansion efforts remain strong. TSLA is entering Saudi Arabia, where the government’s new incentives for EV adoption, including tax exemptions and subsidies, could support growth. It is also working to establish a presence in India through direct car imports and a partnership with Tata Motors Limited.

Analysts project Tesla’s first-quarter EPS to rise by 40% year-over-year to $0.49, with the full year 2025 bottom line expected to grow by 17.7% to $2.40. Looking ahead, 2026 is forecast to see a surge of 37.1% in EPS, reaching $3.29.

What Do Analysts Expect for Tesla Stock?

Analysts have drawn contrasting conclusions about Tesla's future. While some bearish voices are focusing on the company’s first-quarter deliveries, others see long-term potential that cannot be ignored.

Given the diverse perspectives, the consensus rating on TSLA stands at a “Hold.” Among 41 analysts covering the stock, 16 maintain a “Strong Buy,” three recommend a “Moderate Buy,” 12 suggest “Hold,” and 10 advise a “Strong Sell.”

The average price target of $334.08 represents potential upside of 26%, while the Street-high target of $550 suggests an even greater leap of 106% from current levels.