Tesla (NASDAQ:TSLA) surged after posting its Q1-2024 results. The stock rallied by 12% after its earnings were released and added an additional 5% the day after. Despite the notable two-day rally, shares are still down by more than 30% year-to-date. I am bearish on the stock and believe that its year-to-date trend is a better indicator of what’s to come than the stock’s recent post-earnings rally.
The Earnings Report Was Not Great
Tesla reported a 9% year-over-year revenue decline. That alone should spook many investors since the stock trades at a 43x P/E ratio. Even a 30% year-to-date drop does not change the fact that shares are overvalued.
It’s even worse when investors notice that the company’s GAAP net income attributable to common shareholders dropped by 55% year-over-year. Tesla cannot sustain its lofty valuation if it continues to lose market share in key areas like China. Other Chinese EV…
