Tesla stock (NASDAQ: TSLA) has been one of the better performers in any index over the past 5 years, as gains of more than 1,300% can attest. Things have recently taken a bit of a turn however with the performance over the last 12 months a considerably more disappointing -17%.
For those looking to buy Tesla shares, it trades on the Nasdaq stock exchange under the ticker symbol TSLA. The stock is also a component of the S&P 500 index, the Nasdaq 100, and the Nasdaq Industrials (IXID).
Tesla’s share price grew significantly between 2019 and 2021 as the growth in electric vehicles surged. However, it has, in more recent times, declined as demand for EVs has waned. Nevertheless, it is still seen as the leading electric vehicle company.
P/E Ratio Average Over the Last Ten Years: 254.15 (Source: FullRatio)
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Tesla EPS and Revenue Breakdown 2020-2023
| Tesla | Annual EPS | Annual Revenue |
|---|---|---|
| 2020 | $0.21 | $31.54 billion |
| 2021 | $1.63 | $53.82 billion |
| 2022 | $3.62 | $81.46 billion |
| 2023 | $4.30 | $96.77 billion |
There has been a notable shift in the markets’ attention from EV’s to AI, and this new tech has taken some of the focus, and ‘growth’ dollars. Operationally there have also been some challenges, with renewed competition from China really heating up.
Tesla is an electric vehicle and clean energy company founded in 2003. Today, the firm is a leader in the electric vehicle (EV) market and is also known for its clean energy products, such as solar panels and battery storage.
The company focuses on “accelerating the world’s transition to sustainable energy” by designing, developing, manufacturing, and selling EVs, solar energy generation systems, and related products and services. Their product range includes various electric car models, Powerwall home battery storage, and Solar Roof tiles.
Electric Vehicle Industry Comparison
The Tesla competition is really heating up, but having first mover advantage and infrastructure established certainly holds some weight.
Tesla Stock Forecast & Price Targets
According to data compiled by TradingView, out of 51 analysts covering Tesla, 21 have a Buy rating, 19 have a Hold rating, and 11 have a Sell rating on the electric vehicle giant.
In a recent investment research note, analysts at Morgan Stanley said Tesla is “in the midst of the most profound realignment of priorities and strategy in the company’s history.” As a result, the bank says it is “understandably confusing,” but “given time, it may make sense.” Furthermore, they write that the electric vehicle industry is “entering a commoditized dark age, while the AI and robotics industry is entering a renaissance.”
Morgan Stanley, which kept an Overweight rating and $310 price target on Tesla shares, said they see Tesla “making room for the AI ‘capital game.” They also argue that Tesla’s AI potential will stay capped “unless and until the voting control issue is resolved.”
Meanwhile, analysts at Cantor Fitzgerald initiated coverage of Tesla stock with an Overweight rating and a $230 price target in a recent memo. Cantor analysts highlighted various factors that will benefit Tesla, including its Full Self-Driving software, the introduction of lower-priced models, a global manufacturing footprint with economies of scale, and the industry’s largest charging Infrastructure.
While they note that the shares are down year to date, they see the decline as a good entry point for investors who are comfortable taking on volatility, the firm says.
When looking for more longer term views of Tesla, we have found ourselves looking to the tech experts over at Ark Invest. The firm which is run by notable investor Cathie Wood, has recently released a paper in which their Monte Carlo forecast on Tesla stock for 2029 puts the range somewhere between $2,000 and $3,100. Taking a longer view is always significantly more difficult, as there are various assumptions that need to be built into such models but it is an interesting read nevertheless.
Tesla’s CEO is the well-known Elon Musk, who also owns companies such as SpaceX and X (formerly Twitter).
Our View: Tesla is facing some headwinds that have recently pressured the stock However, for those that prefer growth names, its share price at the time of writing (July 2024) may offer an attractive entry point.
With Elon Musk’s pay package now said to be agreed by shareholders, this should lock the enigmatic CEO back up at Tesla and keep his focus firmly on developing the AI tech that is said to offer the next leg up for the firm as it continues to broaden horizons from being a pure EV play. However, any investors considering the stock should first consider the current headwinds.
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Tesla Stock Suitability
Tesla can be a compelling investment opportunity, but it’s not suitable for everyone’s portfolio. You will always want to do your own due diligence, in conjunction with your financial advisor. Here’s a breakdown of who might benefit from buying Tesla shares:
Like any growth stock, Tesla carries inherent risks. Investors should be comfortable with price fluctuations. These fluctuations can be driven by factors like overall market conditions, competition in the electric vehicle space, and company-specific news, including progress on autonomous driving, Tesla’s low-cost model, or production/delivery targets.
Investors who believe in the long-term potential of electric vehicles and clean energy solutions may find Tesla attractive. A long-term horizon allows investors to weather short-term market volatility.
Tesla is known for its innovation and ambition. Investors seeking companies with the potential for high growth may find Tesla appealing. However, this growth potential comes with the previously mentioned risk.
Tesla does not currently pay a dividend. Investors seeking regular income might be better off looking elsewhere.
