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Should I hold or sell Tesla I have an average cost of $291

6/5/2025 11:19pm

Aime

The deep research logic is organized as follows: 

Okay, let's tackle this question. The user is asking whether to hold or sell Tesla stock with an average cost of $291. First, I need to look at the data provided in the references and background. 

Starting with the current price, Reference 1 shows Tesla's closing price on 2025-06-05 is $284.7, which is below the user's average cost of $291. That's a red flag because the stock is trading below the user's entry point. The last change is a -14.26% drop, which is significant. The user is sitting on a loss here.

Next, looking at the financials from References 3 and 4, Tesla's Q1 2025 revenue is $19.34 billion, but the net income is only $420 million, which is a 70.11% YoY decline. Diluted EPS is $0.12, down 70.73% YoY. That's a huge drop in profitability. The 3-year CAGR for revenue is 9.51%, but net income and EPS are both negative, -24.62% and -24.93% respectively. So, the company's financial health isn't great right now.

The technical indicators from Reference 6 show MACD at -13.63, KDJ at -4.89, RSI at 16.81, and Bollinger Bands at 335.27. The RSI is below 30, indicating oversold conditions, but the MACD and KDJ are negative, suggesting bearish momentum. The support level is $273.21, and the resistance is $324.55. The stock closed at $284.7, which is just above the support. However, the recent drop to $284.7 from higher levels (like $344 mentioned in Reference 8) shows a sharp decline.

The user's average cost is $291, which is just above the current price. The stock is trading below that, so the user is underwater. The technicals don't look good either. The recent news articles (References 8-10) mention a drop due to political issues with Trump and Musk, which adds to the bearish sentiment. The robotaxi launch was a positive catalyst, but the political fallout seems to have overshadowed that.

The user's profile mentions they're a tech enthusiast with a focus on short-term gains (5-10% weekly). They prefer tech stocks and have shown interest in speculative opportunities. However, Tesla's recent performance doesn't align with their goal of maximizing short-term gains. The stock is in a downtrend, and the financials are weak. The political risks are high, which could lead to more volatility.

Considering all this, the recommendation would be to sell. The user is already at a loss, and the outlook isn't favorable for a quick recovery. The technicals are bearish, the financials are deteriorating, and there are significant external risks. It's better to cut losses and reallocate to other opportunities that align more with their strategy.

Conclusion

SELL TESLA (TSLA) 🚨
Tesla stock closed at $284.7 on June 5, 2025, a 14.26% drop from the previous day ¹². With your average cost at $291, you are currently underwater by $6.3 (2.16% loss). The stock faces severe technical weakness, profitability declines, and political risks, making it a high-risk holding for short-term gains.

Analysis

1. Current Valuation & Market Position

Price vs. Average Cost: TSLA closed at $284.7 ¹, below your average cost of $291.
Profitability: Q1 2025 net income dropped 70.11% YoY to $420 million, with diluted EPS at $0.12 (down 70.73% YoY) ³⁴.
3-Year Financials: Revenue CAGR is 9.51%, but net income and EPS CAGR are -24.62% and -24.93%, respectively ⁵.

Metric	Q1 2025 (MRQ)	3-Year CAGR (2022–2025)
Total Revenue	$19.34B	+9.51%
Net Income	$420M	-24.62%
Diluted EPS	$0.12	-24.93%

2. Technical Indicators

MACD: -13.63 (bearish crossover) ⁶.
RSI: 16.81 (oversold, but no bullish divergence) ⁶.
Bollinger Bands: Price at $284.7 vs. Bollinger Upper Band at $335.27 ⁶.
Support/Resistance: Current price near $273.21 (support) vs. $324.55 (resistance) ⁷.

Technical Metric	Value (2025-06-05)	Implication
MACD	-13.63	Bearish momentum
RSI	16.81	Oversold, no bounce
Bollinger Bands	$284.7 vs. $335.27	Below upper band

3. Risks & Catalysts

Political Risks: Recent clashes between Elon Musk and President Trump over tax bills and subsidies caused a 14.26% drop in TSLA ⁸⁹.
Competition: European sales plunged 49% YoY ¹⁰¹¹, and Chinese EVs (e.g., BYD) are gaining market share.
Robotaxi Launch: While the June 12 launch in Austin could be a catalyst, regulatory delays and technical execution risks remain ¹²¹³.

4. Short-Term Outlook

Price Target: Analysts project a $289.20 average target (downside of 7.78% from current price) ¹⁴.
Liquidity: Free cash flow for Q1 2025 is $664M, but operating cash flow is $2.16B ¹⁵.
Debt: Debt-to-equity ratio is 0.1%, indicating low leverage but no immediate solvency risks ¹⁵.

Conclusion

Tesla’s fundamentals, technicals, and external risks align against short-term gains. With your average cost at $291, selling now limits losses and frees capital for higher-potential tech plays (e.g., AI, semiconductors).

Final Recommendation: SELL TSLA ¹².

TSLA Trend

Source:

1. TSLA Closing Price