Some investors may worry that they’ve lost out on the opportunity to profit from Tesla (TSLA 2.75). The stock price has fallen more than 25% since the beginning of the year, after rising more than 1,800% in the preceding three years. Although, given the stock’s pre-year valuation, this shouldn’t come as much of a surprise.
The electric vehicle (EV) industry is changing, and Tesla is adapting to stay at the forefront. Tesla has a lot of projects in the works, so even if future profits don’t measure up to past ones, the company should still do well. Examining whether or not today is a suitable moment to invest is important.
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Tesla ran into several problems during the second quarter. Its two new facilities in Texas and Germany were hit especially hard by supply chain delays and soaring raw material prices. As China persisted with its zero-COVID policy, lockdowns at its Shanghai facility hampered production and lowered customer demand.
Despite the challenges, Tesla increased sales by 42% year over year in the second quarter and produced $621 million in free cash flow. If you consider the previous quarter to have been challenging, that’s not awful. The company is now providing a wider variety of products. In a recent interview, Tesla CEO Elon Musk predicted that deliveries of the Tesla Semi truck will begin this year. The Cybertruck pickup variant is expected to debut next year. Beyond that, a lower-priced EV is planned to be introduced to its product line as it decreases expenses.
Production in Tesla’s power sector is also on the rise. Its gigafactories haven’t merely boosted battery output to meet Tesla’s car manufacturing boom. The number of solar power and battery storage systems manufactured and sold by the firm has been on the rise recently. The next chart illustrates similar growth in the first six-month periods of the year since 2019.
One significant disadvantage for investors has always been the company’s value. Stock in Tesla is selling at a P/E of roughly 75 based on this year’s profits if it is assumed, as analysts do on average, that earnings in the second half of 2022 are 50% greater than the first half.
Even yet, the business is making efforts to reduce expenses. Martin Viecha, Tesla’s director of investor relations, said at a recent investor conference that the company’s per-vehicle costs were $84,000 in 2017 and $36,000 in 2018. Continuing that trend will enable Tesla to move into the lower-priced EV market which should help establish mainstream adoption for the EV industry.
In my opinion, Tesla has a bright future ahead of it. A P/E ratio over 70 indicates a very expensive valuation; but, if the firm maintains growth of 50% or more for the next several years, the P/E ratio will look more reasonable. Buying Tesla today might make sense for investors who are planning for the long term, perhaps, ten years or more.
The Best Way to Invest in Tesla (TSLA) Stock.
Sign Up for a Trading Account
The ability to purchase and sell stocks, mutual funds, and exchange-traded funds (ETFs) is facilitated by opening a brokerage account (ETFs). However, a brokerage is more than simply a means to ride TSLA’s meteoric rise to the stars. Investment accounts tailored to specific aims, in addition to all the relevant research and educational resources, may be found there. The following is a good place to go if you’re interested in crypto since it aims to do certain very specific https://coinapp360.com.
Pick an Investment Amount
Perhaps you can’t afford to give Elon Musk your whole salary. After you’ve paid your monthly bills, you may put any remaining money into savings or investments. A portion of the money should go toward retirement savings and an emergency fund if you don’t already have one. The remaining sum, however, is free for Tesla or other investment purposes.
Choose an Order Type and Submit It
Buy your first Tesla shares after determining your first investment amount. The ticker symbol (TSLA) for Tesla shares, together with the desired purchase quantity and investment amount, must be entered into your brokerage account.
Calculate the Return on Your Investment
You should keep an eye on your investments, whether in Tesla or anything else, on a regular basis.
Buying stocks directly from a company may be an interesting and, hopefully, lucrative hobby. It might also make you eligible for shareholder benefits offered by the corporation.
However, investing directly in individual firms might expose you to stock market volatility and unexpected changes in share prices. These days, the stock market may be shaken by anything from a single tweet to a full-scale geopolitical crisis.
Experts advise most consumers to invest across many asset classes and in funds that contain hundreds or thousands of shares across many different companies.
Due to its prominence in the Nasdaq index, Tesla may be found in numerous US-focused “active” and “passive” (index tracker) investment funds.