Is Tesla a good stock to buy? if this question comes to your mind then in this post you will get to know everything, there is never a dull moment with Elon Musk, the founder and Chief Executive of Tesla. He is the richest man in the world and always looking for where to implement his ever-evolving ideas. He has launched astronauts to the International Space Station and opened a new auto manufacturing plant to a roaring crowd in Berlin. This season, he just bought Twitter after becoming its largest shareholder. With all that, everyone is asking questions: Is Tesla a good stock to buy? when will Tesla stock go up? when to buy Tesla stock? tesla stock drop?
Tesla has produced more than 200,000 vehicles in the first quarter. This is above 60% of what it delivered last year and below analyst estimates of over 300,000. The company also has $53.8 billion in revenue and a market capitalization of $900 billion. These have often been seen as overvalued stocks by analysts.
“Relative to other automakers such as GM and Ford Motor as well as Chinese EV players such as Nio, Xpeng, and others, we view these delivery and production numbers as a positive step in the right direction for the next step of the Tesla growth story to take hold with Berlin and Austin factories now green-lighted,” says Daniel Ives, an analyst at Wedbush Securities and one of the most steadfast believers in Tesla on Wall Street.
Reassessing Tesla stock
Investors are reassessing the belief that justified the enormous increase in Tesla stock price. According to Tesla stock StockTwits, it’s $1 trillion valuation will only make sense if investors believe it will dominate the auto industry just like Apple rules smartphones. But Tesla’s shares have dropped more than 40 % since April 4 due to increasing competition, lack of new products, racial discrimination lawsuits, and production problems at Tesla’s factory in Shanghai. These have led to a reduction of more than $400 billion in stock market value and spiked the risks of a Tesla stock split in 2022.
Mr. Musk buys Twitter
The buying of Twitter has strengthened analysts’ perception of Elon Musk. They believe Tesla lacks an independent board of directors that could stop Elon Musk from investing in what can potentially damage the company’s business and brand.
“From a corporate good governance perspective Tesla has a lot of red flags,” said Andrew Poreda, a senior analyst and specialist in socially responsible investing at Sage Advisory Services, an investment firm in Austin, Texas. “There are almost no checks and balances.”
COVID closes China plant
Tesla faced production problems in China due to the COVID outbreak in the country. The lockdowns have affected the supply of crucial parts and materials and car demand. These have undercut one of the rationales why Tesla is one of the world’s most valuable car companies. However, the company reopened its Shanghai factory and had better first-quarter earnings on July 21. Musk is optimistic about the company’s output and an earnings call with investors. He also believes the second-quarter production will be similar to the first quarter or lower.
Tesla’s market share in China reached 2.5% in the first quarter of 2022, competing with the luxury carmakers Mercedes-Benz, BMW, and Audi. An increase in Tesla buyers in China has fueled hopes of supercharged growth in the Tesla market.
Tesla share price
Electric cars have gained popularity because of the increase in gasoline prices, and Tesla’s earnings per share were 246% to $3.22, with sales up 81% to $18.76 billion. Twitter stock has also jumped. These indicate accelerating growth for the company. The company also opened its Berlin and Austin plant, where it will make and ship the Model Y. The new factory will improve the ability of the company to serve the European market. Tesla has benefited from loyal buyers who see Mr Musk as a visionary and are willing to wait for the company’s cars.
Tesla’s growth and competition
According to reports, Tesla accounted for three-quarters of the electric cars sold in the United States last year. Their Model 3 sedan and Model Y sport accounted for 95% of Tesla’s sales. The company is the best in terms of battery technology and software. They are also several years ahead of their competitors in the industry.
Tesla has essentially dominated the EV industry. It has the most advanced self-driving features of any car and one of the lowest maintenance costs. Its popularity will also command a significant portion of EV sales.
The growth of Tesla also seems very promising. In 2021, Tesla produced more than 930,000 cars and aims for twenty million EV sales per year by 2030. This is possible due to its current growth rate. The company also produces many energy products such as solar roofs and storage, charging solutions, and many more. The company will also profit from the world’s transition to renewable energy. These will add to its revenue and relevance in the long run.
When to buy tesla stock
According to analysis, Tesla stock is a risky buy in the short term due to the market’s uncertainty. However, it can return a lot of profit in the long run. Investors also believe making big moves in the current uncertain market should be shunned until the market inevitably recovers. Additionally, investing in Tesla stock should be with small amounts of capital until the market shows more stability. Rising gas prices and an increase in car sales for the company will also reverse the trend if a recession does not happen.
Bottomline
Tesla has been overvalued, at least from a conventional viewpoint for many years, but its stock still increases. Therefore, there is more to a company’s stock than just its revenues and market cap.
