Tesla has price target chopped at Roth

Tesla’s (Tesla Stock Quote, Chart, News, Analysts, Financials NASDAQ: TSLA) better-than-feared Q1 wasn’t enough to keep Roth Capital Partners from trimming its target, as soft revenue and shifting guidance tempered expectations — even as Elon Musk pledged to refocus on the company.

On April 23, Roth lowered its 12-month price target on Tesla (TSLA) to $395 from $450 due to a reduced 2025 revenue forecast but maintained its Buy rating.

Roth Managing Director and Senior Research Analyst Craig Irwin said although Tesla’s Q1 2025 results were “better than feared,” revenue came in significantly below expectations, $19.4-billion versus Roth’s prior estimate of $25.0-billion and the consensus of $21.3 billion. Weak auto market conditions and production disruptions from facility upgrades contributed to the shortfall. As a result, Roth revised its near-term revenue outlook downward, prompting the cut in target price.

“Tesla posted 1Q25 results that were better than feared, and while adjusted auto gross margins of 12.5% marked multi-year lows, they were surprisingly resilient considering the $2bn revenue miss vs consensus,” Irwin said. “The product launch schedule is unchanged with a MiniCar in 1H25, CyberCab beginning service in Austin this June, and an Optimus humanoid robot pilot line starting later this year. We will watch closely for indications of potential DOGE cheques, as consumers could treat these like Tesla gift cards.”

Irwin estimates that Tesla will post EPS of $2.00 on revenue of $98.9-billion in fiscal 2025. He expects EPS of $3.15 on revenue of $111.6-billion in fiscal 2026.

One potential bright spot for TSLA, perhaps, is Elon Musk’s announcement that he will reduce his involvement in the Department of Government Efficiency to focus more on Tesla. He made the statement at the very start of the April 22 Q2 earnings call, saying he plans to spend only one to two days per week on DOGE, with the majority of his attention returning to Tesla.

“Musk expressed a preference for lower tariffs while recognizing policy decisions remain at the discretion of the President,” Irwin said. “Mgmt highlighted prior actions to reduce global supply chain risk, citing that 85% of components for high-volume vehicles in North America are sourced locally, or 95% for those produced in China, and the company is increasing supply chain localization for Berlin. In the Energy business, TSLA’s China-based megafactory, which launched operations in 1Q25, will begin serving markets outside the U.S., and mgmt is in the process of commissioning equipment for the local manufacturing of LFP battery cells in the U.S.”