In this article we will ponder the question is Tesla a good stock to buy especially in light of the latest developments in the EV sector.
It is important to understand Tesla’s sales figures and stock price performance to build an understanding of the company’s journey so far. As well as to have a rough idea of how it is fairing. Tesla had quite an explosive performance in the last 5 years as EV demand soared to new heights. So, lets take a look at its EV sales.
Is Tesla a good stock to buy considering growing competition?
Under normal circumstances, deciding whether to buy Tesla shares would be easy considering its position in the market, as well as past performance. However, things have certainly changed especially as far as competition is concerned.
Over the last few months Chinese EV makers have been making headlines due to their EVs. Some have reportedly been producing high-quality build vehicles while also undercutting the likes of Tesla. On top of that, there are more EV manufacturers coming out of the woodwork to try and take up some of the global market share that Tesla has dominated for a while now.
Traditional automotive manufacturers that have more experience have also joined the club and some of them have been offering competitive products. These factors may be contributing to concerns over Tesla’s ability to remain on top.
If the competition undercuts Tesla by price and market share, then the manufacturer could lose out in potential revenue and sales could diminish. Nevertheless, Tesla’s sales remain healthy despite the fact that competition has been catching up.
Is Tesla a good stock to buy based on EV sales figures?
Tesla’s Tesla’s EV sales have been growing over the years. To give you a perspective, the company managed to sell 48,000 EVs in the U.S in 2017, but it quickly leveled up to 197,517 vehicles in 2018. Fast forward to 2021 and the company managed to sell 234,000 vehicles in the U.S. An impressive gain from the aforementioned years. It leveled up to 354,822 in 2022.
Tesla’s U.S EV sales were even more impressive as the company managed to sell more than 600,000 vehicles. Its U.S sales only represented a third of its global sales, meaning the company has secured a significant market share in the global EV market.
Tesla’s revenue and profit figures also align with the robust sales growth experienced over the years. The EV maker reported a $96.77 billion annual revenue figure which was 18% higher than the revenue the $81.46 billion revenue that company reported in 2022. Tesla achieved positive revenue growth each year for the last 5 years.
Tesla stock split history
The American EV maker’s robust revenue figure has also translated to impressive stock performance and healthy returns for investors. For example, investors got a $4.3 annual earnings per share (EPS) in 2023, which was 18.78% higher than its EPS in the previous year. It also registered positive EPS growth in the last 5 years.
The stock performance has been so robust in the last 5 years that it has necessitated 2 Tesla stock splits in the last 5 years. The first happened in August 2020 after the price peaked above $1,400. The stock price started another aggressive ascent from a low of $388 just 2 months later, peaking at $1,144 just over 12 months later. This necessitated another stock split which happened in August 2022.
Conclusion on is Tesla a good stock to buy?
Tesla’s stock price has so far dipped by 12.13% in the last 12 months. This sell pressure could indicate that liquidity has been shifting elsewhere, especially with the likes of NVidia delivering robust performance. But is this necessarily a bad thing?
The latest Tesla stock split did not attract as much attention as the previous one hence the price has not bounced back as much. However, this could have more to do with the overall tight liquidity conditions in the market courtesy of the Federal Reserve’s hawkish stance.
Tesla’s revenue and stock performance could continue to on a strong trajectory based on sustained demand for the company’s products. It is worth noting that Tesla’s revenue extends beyond EVs. It includes Powerwall batteries and solar roofs which also contribute significantly to its revenues. The latest Tesla stock split coupled with the discounted price may offer a more compelling entry point for potential buyers. The past EPS may also be encouraging for investors looking for healthy dividend yields.
Also check out Is NVIDIA A Good Stock To Buy in 2024/2025?
