Tesla becomes the first Mag 7 stock to ever reclaim 200-day average

Tesla just did something none of the other Magnificent 7 stocks have pulled off in 2025. It closed above its 200-day moving average, making it the only one of the group to recover that technical line.

However, the recovery came after the stock had already lost around 30% year-to-date, and no one buying this rally is looking at the company’s numbers. The data looks worse than ever.

According to Redburn Atlantic, Tesla investors should be heading for the exit. On Tuesday, the firm told clients to sell, warning of a rough year ahead full of falling sales and tighter cash flow.

Adrian Yanoshik, an analyst at Redburn, wrote in a note that “our challenging earnings outlook incorporates headwinds from electric vehicle (EV) pricing, Mexico-US and China-Europe tariffs.” He said the firm expects earnings and free cash flow to land 10% below Wall Street’s estimates.

Redburn expects more downside as EV risks pile up

Yanoshik didn’t stop there. He pointed to possible risks from Washington, saying:

“We note even further risks for downgrades associated with a possible rescinding of US Inflation Reduction Act (IRA) clean vehicle credits.”

If those federal credits disappear, Tesla buyers could lose a key price break, and that could crush already shaky demand. Redburn is calling for a price target of $160, which means a 44% drop from Monday’s close of $285.88.

That puts a hard ceiling on the optimism that pushed the shares up 18% after terrible earnings. Investors are trading this stock like it’s a joke. It’s not moving on performance. It’s moving on, wishful thinking.

Yanoshik also said the new Model Y refresh, which started deliveries in March, won’t change much. “Although aimed at reinvigorating sales, we only consider a modest net volume uplift,” he said.

There’s also a cheaper model coming in June, but the company hasn’t shown it, named it, or said what it’ll do differently. The only thing known is that it’s coming. That’s not a plan. That’s a placeholder.

The actual performance numbers are trash. Over the past four years, Tesla has lagged the S&P 500 by 15 percentage points. Shareholders have taken huge hits with massive swings in the stock.

And nothing real has come out of the company since the Model Y SUV, which launched in 2019. That’s the last major release. No actual innovation in more than five years.

Tesla stock remains wildly overpriced as investors ignore the numbers

Let’s talk valuation. S&P CapitalIQ says Tesla’s price-to-earnings ratio is 164x. That means buyers are paying 164 times the company’s profits for each share. The price-to-sales ratio is 9.51x, which still screams overvalued.

For context, most solid companies trade at around 2x to 3x sales. If you’re paying nearly 10 bucks for every $1 in revenue, you better be sure the company’s gonna triple its business. But Tesla isn’t showing signs that it can even grow at all.

Former Sun Microsystems CEO Scott McNealy once said, “At 10 times revenues, to give you a 10-year payback, I have to pay you 100% of revenues for 10 straight years in dividends.” Then he asked the only question that matters: “What were you thinking?” The math hasn’t changed. Investors are just ignoring it.

The dreams people are buying aren’t about cars. Vitaliy Katsenelson, a money manager based in Denver, broke it down like this: out of Tesla’s $900 billion market cap, only $100 to $180 billion comes from the actual car business.

The rest? That’s all tied to ideas Elon Musk has floated—like robotaxis, robots, and self-driving software—none of which are real businesses yet. Shareholders are basically just gambling on things that haven’t happened.

Even the Full-Self-Driving software, which has been in beta forever, still isn’t finished. No one knows when it’ll actually work. And the Tesla board isn’t independent enough to ask questions or challenge timelines. It’s just along for the ride.

Before the 2024 election, the company already had real problems. Traditional automakers were pushing out better EVs, and charging was still a nightmare for customers.

Range anxiety is still real. The Model 3 and Model Y are both over five years old. The Cybertruck is overpriced and falling apart. Full-Self-Driving is barely operational. And robots? No one outside of Elon thinks those are coming anytime soon.

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