I have long been a sceptic of Tesla stock. I shorted in 2021, and as many others did, I made a decent sized lost. I have remained a sceptic of the stock, although staying away from taking any position. I believe now is the time to re-enter the short trade.

Currently sitting at a $530bn market cap, the Tesla PE is at 40, whilst revenue growth is starting to come to a halt. I consider Toyota to be the benchmark for automobile manufactures. It has a track record of almost 90 years, and sits at a $320bn with a PE of 10. TTM net income is $15bn and $31bn respectively.

Tesla stock still has incredible growth priced into the stock to this day, but I don’t see a world where Tesla earnings grow from here. I see Tesla as a hype/fad product rather than a long-term play. Yes, Tesla cars are cool, and when they first hit the market they were unique. But fast forward a few years and legacy car makers are catching up. There is no moat, there is nothing stopping legacy car makers from making their own version of a Tesla car, and might even do a better job considering the resources and experience they have. A few years ago Tesla cars were shiny and cool, now they’re pretty standard boring cars that frankly have zero character to them.

I consider Tesla’s true value to be between $60-$86. As I write this the stock is sitting at $170 and on a downward trend, it now is the time to take a position. As I have said previously, the stock market is a pendulum that swings too far on each end. The hype around Tesla has died and its peak price was two and a half years ago. The pendulum is starting to swing in the opposite direction…