1 Wall Street Analyst Thinks Tesla Stock Is Going to $325. Is It a Buy Around $250?

Tesla (NASDAQ: TSLA) underwhelmed investors with its first-quarter results. Analysts already were aware that deliveries to start 2025 were 13% lower year over year. A drop in revenue and earnings per share were therefore expected as well. But actual results were still disappointing.

Automotive revenue declined by 20% and an operating margin that was once the envy of the automotive industry tumbled. That led one Wall Street analyst to meaningfully lower his price target on the electric vehicle (EV) leader. Vijay Rakesh with Mizuho Securities shaved $50 off that price target and now feels the stock is worth $325 per share, according to reports.

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That still implies 30% upside from recent levels. Rakesh therefore thinks investors should still buy Tesla stock. That's because of some forward-looking news that came from the company's quarterly release.

Good news from Tesla could be coming soon

Tesla said it remains on track to begin production of new vehicles -- including lower-priced models -- in the first half of this year. That implies investors will get more details on a cheaper EV from Tesla within the next two months.

Another potential bit of good news came from CEO Elon Musk himself on the conference call. Musk said the company is "currently on track to be able to do paid rides fully autonomously in Austin in June." That's a first step to a brand new revenue stream. And it could lead to the fleet of driverless robotaxi vehicles he has teased about for years.

Plenty of risks remain with the stock, though. The company withdrew its annual deliveries outlook after the poor first-quarter performance. Even if its fully autonomous vehicles are on the road in June, those would be Model Y EVs. The Cybercab that would conceivably challenge other ride-sharing companies like Uber Technologies and Alphabet's Waymo wouldn't be launched until next year.

Investors should remain cautious after prior delays in product launches. Allocating a small position makes sense now, but realize that any further delays in new products would likely tank the stock.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Howard Smith has positions in Alphabet and Tesla. The Motley Fool has positions in and recommends Alphabet, Tesla, and Uber Technologies. The Motley Fool has a disclosure policy.