It’s less than a week into the new year, but the market has revved into action, with companies feeling the heat on the trading floor. One such company is Tesla whose stock has fallen almost 10 percent.

However, Gordon Johnson, an analyst at Vertical Research Group, believes the automobile manufacturer still has some much darker days ahead in 2019. According to Johnson, Tesla’s stock price at the end of the year will be pegged at $88. If his predictions are right, the company could see its share price tank by 70% over the course of the year.

Speaking in an interview with CNBC’s Trading Nation, Johnson said:

If you take the Q3 numbers and you annualize them, I think Q3 is going to be the high-water mark for Tesla. I don’t think they’re ever going to reach that level of earnings again. If you look at what the stock’s trading at, you’re talking about like you know near a 100 times multiple on those earnings, and the company is clearly not growing at that level.

In Johnson’s analysis, this high-water mark was the company’s performance in Q3 2018, when the company beat delivery estimates for its electric cars and closed with a profit. October turned out to be the best month in over four years for Tesla, as the company posted a profit of more than 27 percent.

Disappointing Results for Q4

However, things didn’t quite go too well for the company in Q4 2018. Following the publication of their results, Tesla’s stock crumbed by 9.7 percent on Wednesday and Thursday, even though the company finished 2018 with record production numbers. That’s because sales were slightly less than what analysts had hoped for. In addition, the company officially announced that they would implement a $2,000 price reduction on their Model X, Model S, and Model 3 vehicles as a means of offsetting the reduction in federal tax credits for electric vehicles. This tax credit, which saved the company $7,500 per vehicle, was cut in half on Jan. 1.

Can the Chinese and European Markets Save Tesla?

While Johnson believes that the demand for Tesla’s electric cars won’t be enough to help ramp up its stock price, investors will be given some glimmer of hope following an announcement that the company will begin delivering its Model 3 cars to China. Tesla stated that customers in China could start making orders and configurations of Performance and Dual Motor all-wheel drive versions of the vehicle from Jan. 4, while also confirming that initial deliveries will begin in March.

The announcement seemed to have helped the company, as its shares were up nearly 6 percent at Friday’s close.

The company also confirmed that European customers could begin configuring and ordering the left-hand drive versions of the Tesla Model 3 from Jan. 4. They claimed that while the people who ordered these vehicles last year will get their cars delivered in February, those who make their orders before the end of the week will get their cars in March.

Featured Image from Joe Rogan Experience/YouTube