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SUMMARY
Parkev Tatevosian, CFA, details his recent profitable exit from Tesla put options, citing a 31% year-to-date decline in the stock and unexpected positive developments for the company. Despite maintaining that Tesla remains overvalued, he upgrades his rating from sell to hold due to factors such as the SpaceX IPO, rising oil prices, and regulatory changes.
MAIN POINTS
- Parkev Tatevosian closes his Tesla put option position after a significant decline in Tesla's stock price, following a similar profitable trade in 2025.
- He explains his valuation approach, using a discounted cash flow model with optimistic growth assumptions, which still results in a fair value far below the current market price.
- Despite Tesla's ongoing challenges with robo-taxi development, several unexpected positive factors emerge, including the SpaceX IPO and its potential impact on Tesla's stock.
- The onset of a war with Iran drives oil prices higher, benefiting electric vehicle adoption and indirectly supporting Tesla's business.
- Additional surprises such as tariff reductions and new self-driving features for older Teslas further improve the company's outlook, while robo-taxi progress remains slow.
- Tatevosian removes his sell rating on Tesla, upgrading it to hold due to reduced downside risk from SpaceX's acquisition potential and other positive developments.
DETAILED ANALYSIS
Tesla's stock experienced a sharp 31% decline in 2026, prompting Parkev Tatevosian to close his put option position, which he had initiated in late 2025 and augmented in early 2026. This move followed a similar successful trade in 2025, both yielding substantial returns. Tatevosian's conviction was rooted in his assessment that Tesla was significantly overvalued, supported by a discounted cash flow analysis that assumed a generous 7% long-term growth rate and projected free cash flow rising to $76 billion by 2035.
Even with these optimistic forecasts, his fair value estimate for Tesla stood at $124 per share, well below the prevailing market price of $311, highlighting a persistent disconnect between intrinsic value and market valuation.
Despite ongoing skepticism about Tesla's ability to deliver on its ambitious robo-taxi promises, several unforeseen positive developments influenced the decision to exit the bearish position. The high-profile SpaceX IPO at a $2 trillion valuation introduced the possibility of SpaceX acquiring Tesla if its stock price fell further, effectively placing a floor under Tesla's valuation. Additionally, the outbreak of war with Iran led to a spike in oil prices, which improved the relative attractiveness of electric vehicles and boosted demand for Tesla's products and charging network.
Other unexpected tailwinds included tariff reductions following Supreme Court orders and the rollout of enhanced self-driving features for older Tesla models, both contributing to improved margins and revenue streams.
While the core thesis regarding the slow progress of the robo-taxi initiative remained intact, these cumulative positive factors led Tatevosian to moderate his bearish stance. With Tesla already down significantly and new downside protections in place, he removed his sell rating and upgraded Tesla to a hold, acknowledging the reduced risk of further declines and the strategic implications of a potential SpaceX acquisition.
LINKS
- YouTube channel membership for early access and exclusive perks.
- Special offer for The Motley Fool Stock Advisor.
- Parkev Tatevosian's book on stock investing framework.
- Fiscal.ai investment research platform with viewer discount.
- Webull sign-up for bonus shares.
- Subscribe to Parkev Tatevosian's free monthly newsletter on Substack.