Black’s comments come amid Tesla’s expansion of its robotaxi services, with the company adding two new Texas hubs at Dallas and Houston over the weekend.
Black stated that stocks cannot maintain price-to-earnings multiples of more than 200 unless their franchises are uniquely scalable and unassailable.At the moment, Tesla’s trailing 12-month PE stands at about 371, while its 12-month forward PE is at 192.Black also stated that, with its robotaxis, Tesla may not be able to replicate Apple’s success with the iPhone because it lacks the skills to communicate with and educate mass consumers.
As Tesla Inc. (TSLA) heads into a critical earnings week, the debate around its valuation is heating up again. The Future Fund LLC Managing Partner, Gary Black, on Monday warned that the EV maker’s valuations are “too rich,” even as retail traders double down on the long-term story.
Black stated that stocks cannot maintain price-to-earnings multiples of more than 200 unless their franchises are uniquely scalable and unassailable. At the moment, Tesla’s trailing 12-month PE stands at about 371, while its 12-month forward PE is at 192.
“TSLA’s current 2026 P/E is 200x (rolling 4-qtr forward 190x) vs 2026-2030 forecasted compound EPS growth of +37% so a PEG of 5.4x. That math doesn’t work given PEGs of 2.0-2.5x for other megacap tech stocks,” Black stated in a post on X.
Tesla shares were down nearly 1% in Monday’s pre-market trade.
Black Explains Why Tesla May Not Replicate Apple’s Success
Black also stated that with its robotaxis, Tesla may not be able to replicate the success that Apple managed with the iPhone because it does not have the skills to communicate with and educate mass consumers like Apple was able to.
“Absent advertising, TSLA may solve for and scale up unsupervised autonomy the fastest of all OEMs but may not capture their share of demand,” he added.
Black stated that when modeling Tesla’s economics, investors cannot take a capacity-based approach. He added that one must instead forecast TSLA’s ride-hailing economics based on the total addressable market for autonomous driving and multiply it by Tesla’s projected market share.
This needs to be based on Tesla’s relative cost advantage, brand equity, and the potential to scale up, since that will approximate the Elon Musk-led EV giant’s demand rather than capacity.
Black’s comments come amid Tesla’s expansion of its robotaxi services, with the company adding two new Texas hubs at Dallas and Houston over the weekend.
Meanwhile, analysts at TD Cowen lowered their price target for TSLA to $490 from $519 while maintaining a ‘Buy’ rating. The firm stated that Tesla’s first-quarter (Q1) delivery miss and a quiet quarter on the robotaxi front have dampened sentiments heading into the earnings next week.
Last week, ride-hailing giant Uber Technologies Inc. (UBER) invested an additional $200 million in Tesla rival Lucid Group Inc. (LCID), while also increasing its purchase commitment of Lucid vehicles to 35,000 from 20,000 for its robotaxi service.
Tesla’s Q1 Delivery Miss In Focus
Tesla reported deliveries of 358,023 electric vehicles worldwide in Q1, falling short of a consensus estimate of 365,645 units, as compiled by the company.
The EV giant manufactured 408,386 vehicles during the quarter, which was its second consecutive quarter of delivery miss. In January, Tesla reported 418,227 deliveries in the fourth quarter (Q4), while Wall Street expected the EV giant to report 422,850 deliveries during the quarter.
All Eyes On Tesla Q1 Earnings Report
Tesla is scheduled to report its Q1 earnings on April 22, 2026. Wall Street expects the company to report earnings per share (EPS) of $0.38 on revenue of $22.34 billion, according to Fiscal.ai data.
How Did Retail Traders React?
Retail sentiment on Stocktwits around Tesla trended in the ‘extremely bullish’ territory, with message volumes at ‘high’ levels at the time of writing.
One user stated that if Tesla’s robotaxi service works in three cities, it also works in 20,000 towns and cities.
Another user stated that the robotaxi rollout expansion indicates that Tesla will be able to scale up the service much faster than markets anticipate.
TSLA stock is down 11% year-to-date, but up 66% over the past 12 months. The S&P 500 ETF (SPY) is up 35% over the past 12 months, while the Invesco QQQ Trust ETF (QQQ) is up 46%.
Also See: Cleveland-Cliffs CEO Touts ‘Stronger Position’ Amid Middle East Turmoil As It Beats Q1 Estimates
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