Tesla Inc. TSLA continues to face significant headwinds in its automotive business, with concerns mounting over sustained margin pressure and underperformance against broader tech indices, according to an analysis from The Future Fund LLC.

What Happened: Gary Black, managing partner at The Future Fund, emphasizes his firm’s analytical approach to valuation, notably excluding potential revenue from robotaxis and Optimus until competitive dynamics and economics become clearer.

Black, highlighted Tesla’s recent underperformance, noting a 24% decline against the Nasdaq 100’s 32% gain over three years. However, Future Fund maintains a long position in Tesla, citing robust global EV adoption trends and expansion opportunities.

“Global EV adoption continues to surge, from 15% today to 50% by 2030, representing a 25.8% CAGR,” Black noted on X, formerly Twitter. The firm projects Tesla can maintain its market share by entering new segments, including a $25-30K compact vehicle, robotaxi services, and small pickups.

Future Fund’s detailed valuation model includes:

• 2030 delivery target of 8.8 million vehicles
• Projected adjusted EPS of $15.00
• Price target of $270, based on a 1.5x PEG ratio and 25% forward EPS growth
• 2030 valuation of $562, discounted at a 14.2% cost of equity

“We realize many $TSLA investors disdain our analytical-based approach to TSLA valuation, but that’s how the investment world works. One can’t just make up valuations out of thin air.” Black wrote.

Black explained that The Future Fund models EV demand and market share, FSD adoption rates, energy, and services. However, they refrain from including Robotaxi or Optimus in their valuation until they can evaluate the competitive dynamics and economics of these future products.

The firm believes that multiple automakers will be approved for generalized unsupervised autonomy around the same time, suggesting that a demand-driven model is more appropriate for valuation rather than a supply-driven one.

Near-term challenges include:

• Auto loan interest rates of 0.99% globally
• Negative Cybertruck margins
• Limited scale production, with Q3 Cybertruck deliveries estimated at 13,500 units

See Also: Palantir Technologies Unusual Options Activity

Why It Matters: Tesla’s financial performance is crucial as the company navigates a series of strategic shifts. Recently, Tesla showcased its Optimus humanoid robot, demonstrating advancements in autonomous navigation and charging capabilities.

This move aligns with Tesla’s broader vision for autonomy, a field where Waymo co-founder Anthony Levandowski sees Tesla having an edge due to its extensive data collection.

Additionally, Tesla’s recent executive promotions indicate a strategic realignment to bolster its sales and manufacturing operations.

These developments come as Gene Munster from Deepwater Asset Management discusses Tesla’s ambitious plans for robotaxis, which could revolutionize transportation and save significant time and resources.

Price Action: Tesla Inc. closed at $220.70 on Friday, down 0.086%. In after-hours trading, the stock further declined 0.25%. Year to date, Tesla’s stock has decreased by 11.16%, according to data from Benzinga Pro.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.