Top Analyst Questions Tesla's Valuation Amid Declining Sales: 'Doesn't Make Mathematical Sense'

Investor and analyst Gary Black, managing director of The Future Fund LLC, has questioned Tesla Inc.'s (NASDAQ:TSLA) valuation yet again as sales continue a downward trend.

Does Not Make Mathematical Sense

In a post on the social media platform X on Tuesday, the investor raised questions about the EV giant's valuation. "$TSLA can't trade at a 200x+ forward P/E if EV sales continue to decline," the investor shared in his post.

"I realize TSLA isn't just a car company," Black said,  but added that the valuation "doesn't make mathematical sense" when accounting for the fact that EV sales comprise over 72% of the automaker's profits. The investor also outlined that Tesla's "near-term 2026 and long-term 2030 Adj EPS estimates" were also declining.

It’s worth noting that Tesla’s Master Plan IV, released last year, outlines a significant shift in focus away from its core EV business to autonomous driving and robotics, with CEO Elon Musk predicting that the company’s Optimus humanoid robot would comprise 80% of Tesla’s future value.

Tesla Sales, Marketing Woes

The comments follow Tesla's Model Y SUV emerging as the best-selling EV in the U.S. market in 2025, with the company selling more than 350,528 units of the SUV last year. However, Tesla's cumulative sales were still down as the automaker sold close to 589,000 units, a 7% decline.

Elsewhere, the investor has also urged the automaker to up its marketing game, with the company's Full Self-Driving (FSD) technology boasting a take rate of approximately 15%. Black had also warned Tesla that its lack of marketing could risk the company being left behind its Robotaxi and autonomous driving peers.

Tesla scores well on the Momentum metric, while offering satisfactory Quality, but poor Value. It also has a favorable price trend in the Short, Medium, and Long term. For more such insights, sign up for Benzinga Edge Stock Rankings today!

Price Action: TSLA slipped 0.39% at Market close on Tuesday to $447.20, declining 0.08% further to $446.85 during After-hours trading, according to Benzinga Pro data.

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