Shares in Tesla Inc. (TSLA, Financial) fell near 3% in Thursday’s morning trading, while Goldman Sachs reaffirmed its Neutral rating and kept the stock’s price target at $345.
Tesla continues to reign in the automotive market with a market capitalization of $1.37 trillion. Goldman Sachs analysts revised their model so that it includes Tesla’s Full Self Driving (FSD) capabilities and robotaxi revenues in the forecast for 2027. The firm also made some big strides in FSD technology, much more advanced than the previous version, as verified through internal demos, crowdsourced feedback and third-party evaluation.
Even those gains come with caveats, particularly when it comes to Level 3 (L3) autonomy where drivers can divert their attention from the road safely Goldman Sachs noted. Analysts expect Tesla’s robotaxi business to go live in the second half of 2026 and generate revenue of roughly $115 million in 2027. However, they expect the Robotaxi segment to have a neutral effect on Tesla’s consolidated earnings per share (EPS) in the early stages.
Tesla’s financial position suggests it has a strong cash-to-debt ratio, and is the leader in autonomous driving technology. The company’s long-term prospects are still strong yet investors are skittish about its near-term valuation and execution risks.
This article first appeared on GuruFocus.