Is It Too Late to Buy Tesla Stock? The Motley Fool

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Is It Too Late to Buy Tesla Stock? The Motley Fool

In the U.S., Tesla has removed its standard range Model S and Model X versions in the U.S. and dropped the price of the Model X all-wheel drive version below $80,000. This now makes the Model X eligible for the federal $7,500 tax credit under the Inflation Reduction Act (IRA), confirmed by the Internal Revenue Service on September 6. Tesla reported revenue increasing 24% to $23.33 billion with EPS of 85 cents, a 20% decline compared to 2022. Almost single-handedly, Musk has turned the auto industry on its head, essentially forcing it to get aboard the electric-vehicle train. The analyst added that Chief Executive Elon Musk presents a “considerable singleman risk.” “We see considerable potential in Tesla’s prospects and ideas, but we think the timeline is likely to be longer than the market and valuation is reflecting,” Tyndall wrote.

You’ll need to add money to the account and then search for Tesla stock within the brokerage’s platform using the symbol “TSLA.” You cannot buy Tesla stock directly from Tesla the company. Our partners cannot pay us to guarantee favorable reviews of their products or services. In Germany, Tesla lowered the price of its Model 3 and Model Y vehicles by between 4.5% and 9.8%, while it cut prices of the Model 3 and Model Y vehicles in Singapore between 4.3% and 5%. The company reported mixed fourth-quarter results on Jan. 25, topping earnings estimates but missing on revenue.

Splits And Stock Performance

We think Tesla has a cost advantage in EV production thanks to its manufacturing scale. The firm’s total vehicle volume has grown from just over 100,000 in 2017 to over 1.3 million deliveries in 2022. We think Tesla will be successful in continuing to reduce its manufacturing costs on a per-vehicle basis. If you’re going to load up on shares, you should do it because you believe in the company’s long-term growth potential.

  • Still, 45 times forward earnings isn’t a cheap price to pay for any company.
  • Musk is, among other things, a master of using the media to generate attention for Tesla.
  • So a company trading at $5 per share can initiate a 1-for-2 reverse split, resulting in a $10 share price.
  • But sometimes a fast series of stock splits may be a warning sign to sell.
  • For 2023, Tesla plans on achieving its 50% compounded annual growth rate of vehicle delivery since 2020, indicating about 1.7 million deliveries in 2023, or a 29% rise over 2022’s numbers.

Lower gross margins mean less capital to make profits from, but Tesla offset that with a 16% reduction in operating expenses — something few other companies can say occurred in Q4. Those cost savings allowed Tesla to post $1.07 in Q4 earnings per share (EPS) — a 57% increase. “An index fund that houses Tesla shares may provide you with greater diversification because you are purchasing a basket of stocks rather than just Tesla stock,” says Kirby. The company reaffirmed its long-term goal to sell 20 million vehicles annually. Electric-car demand is anticipated to remain high for many years.

Tesla Is Falling, but Another Luxury Stock Looks More Beautiful Than Ever

Higher interest rates can increase its interest expenses, potentially impacting profitability and cash flow, which investors closely monitor. Before you load up the trunk with Tesla shares, pop open the hood and see what you’re really getting into. Remember, when you buy a stock, you’re purchasing a small portion of an actual business, not just hitching a ride on a cult of personality. After you’ve allocated a reasonable amount toward Tesla, you’ll need to develop an investment strategy to both maintain and grow those shares.

Tesla reported first-quarter deliveries that hit a record, but the company fell short of estimates once again. Analysts expect Tesla will continue to face pricing pressure in the second quarter. But throngs of investors care mostly about whether they continue to make loads of money off Tesla stock. And Tesla stock has been slipping again after a massive run that began the year. As an automaker, it is subject to potential product defects that could result in recalls, including its autonomous driving software.

What’s Going On With Tesla Stock Today

This move will likely cause the automotive gross margin to fall to its lowest point in five years in 2023. When the Federal Reserve maintains or hints at future rate hikes, it can lead to higher borrowing costs for companies. Like many other companies in the broader tech sector, Tesla relies on borrowing for various purposes, including financing its operations and investments. Tesla’s balance sheet, income statement, competition and management (all explained in our guide on how to research stocks) will help you give the company a good once-over. If this is all new to you, here is what you’ll need to know to open a brokerage account.

More Reasons to Invest

However, shares didn’t rise yesterday and moved slightly lower in premarket trading on Friday morning. One stock that did move sharply higher, though, was Ulta Beauty (ULTA -0.94%). Excessive stock splitting has been seen at market tops in the past, especially when tech stocks topped in 2000.

That bullish trend paired with recent gains landed Tesla stock on the IBD 50 list of top growth stocks on Aug. 18. Experts suggest aiming for three-to-six months’ worth of expenses, though even $500 to $1,000 is a good start. Your emergency fund should go not into an individual stock like Tesla, but into a high-yield savings account where it is safe and accessible.

In reality, it’s a mixture of these things, but investors have to determine which case has more merit. What if you don’t have enough to buy an entire share of Tesla? You may be able to purchase a fractional share — essentially a piece of a share. Several brokers now offer fractional shares of individual stocks. This is the “don’t put all of your eggs in one basket” rule you may have heard.

Deliveries Completed Earnings Coming Up

Tesla’s brand cachet is not likely to be impaired anytime soon as other automakers move into the EV space. We expect the company to keep innovating to stay ahead of startup and established competitors. By focusing on the luxury auto market first, Tesla was able to create tremendous publicity that reached beyond its customers. If you do, there’s no tax consequence from the split, even if you own the stock in a taxable brokerage account. If Tesla can roll out self-driving features that are better than its competitors, its stock price may see further gains in the long term too. Looking at its track record so far, I’m inclined to believe that Tesla has a fair chance of accomplishing this feat.

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