In less than two months, Tesla's market value has evaporated by about $400 billion, and its stock price has fallen nearly 26% from the historical closing high in December last year, prompting some investors to consider buying the dip. However, Wall Street has issued a clear warning to those contemplating this: proceed with caution.
Data shows that Tesla has been the worst-performing large-cap tech stock this year and the third worst in the Nasdaq 100 index. Nevertheless, analysts still believe that the current decline may not be deep enough:
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&#34;Given the continued deterioration of Tesla's sales in key markets, its stock price remains overvalued.&#34;
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Behind Tesla's stock price plunge is the ongoing weakening of its electric vehicle business outlook. During the earnings call on January 29, Tesla lowered its vehicle sales growth forecast for the year. Subsequently, disappointing sales data from Germany, France, and California further exacerbated the trend of the stock price &#34;continuously declining.&#34;
When will it hit bottom? Evercore ISI analyst Chris McNally believes that there may not be any substantial positive news to drive a rebound in the stock price until Tesla announces the launch of its robotaxi service in June.
Currently, Tesla's price-to-earnings ratio stands at 119 times, far exceeding the average of 30 times for the &#34;seven giants&#34; and 22 times for the S&amp;P 500 index. Steve Sosnick, chief strategist at Interactive Brokers, warned:
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&#34;High valuations mean that any disappointing news or anything that undermines confidence will indicate that there is still significant room for the stock price to decline before value-oriented buyers step in.&#34;
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This also explains the trend in the options market, where traders' bullish sentiment has weakened. In recent days, volatility has begun to rise, indicating that traders are starting to pay higher premiums for protective contracts against a stock price decline.
Matt Maley, chief market strategist at Miller Tabak + Co., also stated that fundamentals remain important for the stock market, and this stock's trading price is still above its fundamental outlook.
Data shows that Tesla has fallen 6.15% year-to-date, with a pre-market increase of 1.31% today. Matt Maley added, &#34;Even after a short-term rebound, Tesla's stock price is likely to weaken further in the coming months.&#34;
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Technical analysts are also cautious. Mark Newton, head of technical strategy at Fundstrat, stated, &#34;I don't think this stock has hit bottom yet; it may decline again, which could happen in the next one to two weeks.&#34; He expects the stock price to fall back to around $314, about 12% lower than the current level

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Tesla's stock price has fallen nearly 26% from its historical closing high in December of last year. Analysts believe that the sharp decline in stock price is due to the continued weakening of its electric vehicle business prospects. Last month, the company lowered its growth forecast for vehicle sales this year. However, analysts believe that the current decline may not be deep enough, and even after a short-term rebound, the stock price is expected to weaken further in the coming months

- Tesla's market value has decreased by approximately $400 billion in less than two months, with a nearly 26% drop from its December peak.  
- Analysts warn potential investors to proceed with caution, citing Tesla's poor performance among large tech stocks and a high price-to-earnings ratio of 119.  
- The company's declining sales forecasts and disappointing data from key markets suggest further price declines may occur before any positive news, with predictions of a potential drop to around $314.