![]() ![]() auto industry:ġ.) It's the only major U.S. There are some things about Tesla that are unique in the U.S. ![]() If you think the company will continue to grow and deliver strong results, then you're like going to write off these next two sections - but hear us out. Tesla's product lines are well loved by drivers, and the stock's momentum is evidence that investors are still giving the company their vote of confidence. Going forward, we think that there is a probability that the company will continue its strong momentum. Despite historically high inflation and a terrible consumer environment, Tesla managed to eke out 9% top line YoY sales growth, which pales in comparison to previous years, but tops weaker results from peers: The stock has also begun making new highs and new lows (as evidenced by the pivot points above), which contrasts with the negative price structure experienced in 2022 that saw lower highs and lower lows.įinancially, momentum has also remained relatively strong. However, year-to-date, the stock has recovered, trading back up into the middle of the aforementioned range. Since 2019, Tesla's top line has grown from $21 billion to nearly $100 billion, an almost 5x increase, and net income has exploded from ~$1 billion in losses to nearly $11 billion in net profits:Īs net profit growth has slowed to basically nothing over the economic slowdown and inflationary period in 20, the stock has come in somewhat, dropping to $100 a share - a 75% decline from 2021 highs: This has been accompanied by a massive run in the company's underlying financial results. Since the company broke out from its price base right before Covid, the stock has gone on one of the most unbelievable runs - trading from (post-split) $12 to ~$407, a massive 3,300%+ run: There's no denying that Tesla has done well over the last few years. Let's examine each of these in more detail. On the bearish side, you have two key considerations: On the bullish side, you have two key factors: Where you land on the spectrum of "Buy" to "Sell" is simply a function of how heavily you weight the impact of these trends. Important TrendsĪs we'll cover over the next few sections, there are four, strong trends at play that will affect the stock price of Tesla going forward. If you're short on time - we don't think it is. Thus, with that in mind, today we thought we'd take a sober look at the company to try and figure out whether or not the stock is a buy at the present valuation. The company isn't the singular energy / transportation titan of the future it will simply remain a piece of the global pie. However, despite the company's best efforts, Tesla firmly remains an automaker. The company's solid cash position and excellent products have all but removed chapter 11 from the menu of options. The range of outcomes has also been reduced considerably. It's easy to forget, but during the mania in 2021 as many investors struggled to understand why the stock was trading at a 26x revenue multiple, a common refrain from bulls was that "Tesla is not just a car company."Īs Tesla has matured, the company has gotten into a rhythm, and we feel more comfortable now understanding the stock. However, understanding Tesla has eluded us due to the nature of the business, and a lack of confidence on our part in understanding Tesla's total addressable market, or TAM. You can see this in articles we've published about Coinbase ( COIN), a company which has a large range of potential outcomes over the next few years. Sometimes, we feel comfortable writing on a stock with a large potential variance in outcome if we feel like we know the market better than most. Could this upstart automaker take over a large portion of the global auto trade by 2030? Sure. In short, the number of potential outcomes for the company has, up until recently, remained too large to wrap our arms around. Despite having strong feelings - in both directions - about this automaker over the last few years, we've never published our feelings on the stock, despite following it closely. ![]()
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