Tesla Stock Review

• Sector: Consumer Durables
• CEO: Elon Reeve Musk
• Index: Nasdaq
• Website: https://www.tesla.com/
• Founded: 2003
• Headquarters: Austin
• Employees: 140.47K

• Next Report Date: 16th of October 2024
• Report Period: Q3 2024
• EPS Estimate: 0.61 USD
• Revenue Estimate: 25.70 Billion USD

EPS stands for Earnings Per Share, and an EPS estimate refers to the predicted earnings that a company is expected to generate per share of its outstanding stock during a specific period, typically a quarter or a year. Analysts and investors use EPS estimates to gauge a company’s profitability and financial health.

Key Points:

• Calculating EPS: EPS is calculated by dividing a company’s net income by the number of outstanding shares.
• Types of EPS: There are different types of EPS, including basic EPS (which uses the total number of shares) and diluted EPS (which accounts for potential dilution from options, convertible securities, etc.).
• Significance of Estimates: EPS estimates are important because they can influence investor sentiment and stock prices. If a company reports earnings above analysts’ EPS estimates, it often leads to a rise in its stock price, while falling short can lead to a decline.

Disclaimer: The technical analysis provided below for NVIDIA is for informational purposes only and should not be construed as a buy or sell signal. Please conduct your own research and consult with a financial professional before making any investment decisions.

Tesla’s primary appeal remains its leadership in the EV market, but it’s much more than a car company. Here are some key growth drivers for Tesla:

1. Global EV Demand
   With governments pushing for greener energy solutions, Tesla’s future is supported by increasing global demand for EVs. Recent data shows that EV sales globally have surged by 32% in the past year, with Tesla holding a 17% market share. Tesla remains a market leader despite emerging competition from the likes of Rivian, Lucid Motors, and legacy carmakers like Ford and GM pushing their EV lines.
2. Energy Business Expansion
   Tesla’s energy generation and storage business is often overlooked but is a growing part of its long-term strategy. In 2024, Tesla Energy recorded a 74% year-over-year increase, driven by the expansion of solar and battery storage solutions. This side of the business, although currently less profitable, has huge potential, especially as the world transitions to renewable energy.
3. AI and Autonomous Driving
   Tesla continues to invest heavily in artificial intelligence and autonomous driving technology. FSD (Full-Self Driving) is still in its beta phase, but the long-term potential is massive. Tesla’s AI capabilities have attracted top-tier talent, positioning the company to lead in a world where autonomous vehicles could become mainstream.

Risks and Challenges

While Tesla’s future seems bright, it’s not without risks. Here are some key considerations:

1. Competition
   The EV market is heating up, with many automakers catching up to Tesla’s dominance. Chinese brands like BYD and NIO are rapidly expanding, and legacy automakers are not far behind. Tesla is still leading the race, but competition could erode its market share over time.
2. Price Volatility
   Tesla’s stock is known for its extreme swings. In 2024 alone, Tesla saw its stock fluctuate between $160 and $300, a range that’s not for the faint of heart. This volatility is often tied to macroeconomic factors, company news, or even statements from CEO Elon Musk, so investors should be ready for a wild ride.
3. Regulatory Scrutiny
   Governments worldwide are tightening regulations around EV production, emissions, and autonomous driving. Any missteps in compliance could lead to penalties or delays in launching Tesla’s next-generation vehicles. Additionally, ongoing investigations into Tesla’s FSD system could impact the company’s reputation.

One of the biggest concerns surrounding Tesla is its valuation. As of September 2024, Tesla has a market cap of around $870 billion, which puts it in the same league as tech giants like Apple and Microsoft. However, some critics argue that Tesla’s stock price doesn’t align with its actual earnings.

Tesla’s P/E (price-to-earnings) ratio is currently hovering around 80, which is extremely high compared to traditional automakers like Ford (P/E ratio of 7) and GM (P/E ratio of 6). However, Tesla’s high valuation is largely due to its growth prospects and leadership in cutting-edge technologies like AI and battery tech.

Should You Buy Tesla Stock Now?

Now, the million-dollar question: Is Tesla stock a buy?

If you’re a long-term investor who believes in Tesla’s vision for the future, the stock could still offer solid growth. Its leadership in the EV market, expansion into energy solutions, and investments in AI make Tesla more than just a car company. However, if you’re looking for immediate returns or are wary of stock price volatility, it might be worth waiting for a better entry point.