Down Almost 30% in the Past Month, Here Are 2 Reasons to Buy Tesla and 1 Reason to Hold Off
Buy: Business is booming
In a quarter rife with macroeconomic challenges and COVID-related shutdowns in its Shanghai factory, $Tesla (TSLA.US)$ delivered big for its shareholders. The company raked in total sales of $18.8 billion, growing 81% year over year and beating Wall Street estimates by 5%. Likewise, earnings per share (EPS) finished at $3.22, climbing 246% and smashing consensus forecasts by a whopping 42%. The EV commander produced 305,407 vehicles and completed 310,048 deliveries, adding to the already-strong quarter with respective increases of 69% and 68%.
Buy: Massive industry potential
$Tesla (TSLA.US)$ brings a lot of mainstream attention to the EV market, but don't be fooled: The industry is still in its early innings. As of today, there are more than 10 million electric vehicles on the road, but that represents just 1% of global car stock. By 2030, it's projected that there will be 300 million electric cars on the road, a 2,900% upsurge from existing levels. It's also expected that EVs will account for 60% of new car sales by then, a drastic increase from 5% in 2020.
Stay away: Steep valuation
At face value, Tesla's valuation appears outrageous. The stock is trading at 95.8 times earnings today, indicating a lofty valuation in and of itself. Competitors $Ford Motor (F.US)$ , $General Motors (GM.US)$ , and Toyota carry price-to-earnings multiples of 4.5, 6, and 8.5.
Should you buy Tesla? $Tesla (TSLA.US)$
In a quarter rife with macroeconomic challenges and COVID-related shutdowns in its Shanghai factory, $Tesla (TSLA.US)$ delivered big for its shareholders. The company raked in total sales of $18.8 billion, growing 81% year over year and beating Wall Street estimates by 5%. Likewise, earnings per share (EPS) finished at $3.22, climbing 246% and smashing consensus forecasts by a whopping 42%. The EV commander produced 305,407 vehicles and completed 310,048 deliveries, adding to the already-strong quarter with respective increases of 69% and 68%.
Buy: Massive industry potential
$Tesla (TSLA.US)$ brings a lot of mainstream attention to the EV market, but don't be fooled: The industry is still in its early innings. As of today, there are more than 10 million electric vehicles on the road, but that represents just 1% of global car stock. By 2030, it's projected that there will be 300 million electric cars on the road, a 2,900% upsurge from existing levels. It's also expected that EVs will account for 60% of new car sales by then, a drastic increase from 5% in 2020.
Stay away: Steep valuation
At face value, Tesla's valuation appears outrageous. The stock is trading at 95.8 times earnings today, indicating a lofty valuation in and of itself. Competitors $Ford Motor (F.US)$ , $General Motors (GM.US)$ , and Toyota carry price-to-earnings multiples of 4.5, 6, and 8.5.
Should you buy Tesla? $Tesla (TSLA.US)$
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