From Nasdaq: 2024-04-28 04:09:00

In the last decade, Tesla’s shares (NASDAQ: TSLA) have surged by 1,100%, outperforming the Nasdaq Composite Index. This growth can be credited to the company’s leadership in the electric vehicle (EV) industry and its popular cars with innovative software features.

Despite recent struggles, Tesla remains a key player in the EV market with a 20% global market share for battery EVs. The company’s Model S kickstarted a trend in EVs in 2012, leading to competitive investments from traditional automakers. Cars make up 85% of Tesla’s revenue, with additional income from services and energy sales.

With a high price-to-earnings ratio of 42.5, Tesla is viewed more as a story stock than a traditional automaker. Founder Elon Musk’s grand ambitions drive shareholder enthusiasm, despite uncertain outcomes. The stock’s valuation reflects this belief, making it essential for investors to consider the influence of Musk’s narratives on the company’s performance.

Tesla’s stock has faced significant downturns, down 59% from its peak, due to challenges like declining revenue and net income. Softening EV demand globally, especially outside China, has led to price cuts to stimulate sales. These market conditions, combined with increased competition, pose ongoing challenges for Tesla’s financial performance.

The Motley Fool recommends Tesla as one of the top 10 stocks to buy right now, alongside other overlooked opportunities. While Tesla’s stock performance faces uncertainties, understanding the factors affecting its valuation and potential growth can help inform investment decisions moving forward.



Read more at Nasdaq: 3 Things to Know About Tesla Before You Buy the Stock