In the latest blow to Tesla Inc., yet another analyst has downgraded the electric vehicle maker's stock and expressed concerns about its sales performance. Wells Fargo analyst Colin Langan warned that Tesla's strategy of cutting prices to boost demand was losing effectiveness, and predicted that sales volumes would be flat this year and decline in 2025.

Langan described Tesla as a "growth company with no growth," citing the meager 3% increase in sales volumes in the second half of 2023 compared to the first half, while prices fell by 5%. This assessment has contributed to the mounting skepticism on Wall Street, leading to the lowest share of bullish ratings on Tesla since April 2021.

The pessimistic sentiment towards Tesla has been fueled in part by the company's own announcement in January, acknowledging that its growth would be "notably lower" this year. This cautionary statement aligns with similar concerns expressed by other automakers, EV suppliers, and even rental-car companies regarding the near-term demand for electric vehicles.

As a result of these doubts, Tesla's shares have taken a significant hit. The stock has already declined by 29% this year, making it one of the weakest performers in the S&P 500 Index. At the time of this report, Tesla shares fell by as much as 2.8% in New York.

The market downturn has had a substantial impact on Tesla's market value, with over $224 billion wiped off since the beginning of the year. This has caused the company to drop out of the top 10 list of largest companies on the S&P 500. Despite the decline, Tesla's stock is still trading at a high valuation, with a forward earnings multiple of 55 times, compared to the average of approximately 31 for the Bloomberg Magnificent 7 Price Return Index.

Wells Fargo's Langan emphasized the valuation discrepancy, stating that while Tesla is an EV and battery technology leader, it fares poorly compared to its peers. In light of this discrepancy, Langan lowered his profit estimate for Tesla in 2024 to $2 per share from $2.40, contrasting with the market's average expectation of $3.03 per share for the year.

However, not all analysts share the bearish outlook on Tesla. Wedbush analyst Dan Ives believes that despite the moderation in the global demand for EVs, Tesla is still on track for growth and margin improvement in the coming quarters. Ives wrote in a note that "now is not the time to throw in the towel on Tesla."

The conflicting opinions among analysts reflect the ongoing debate surrounding Tesla's future prospects. Investors will be closely watching how the company responds to the challenges and whether it can regain its growth trajectory in the face of mounting skepticism.