is tesla a good buy

A current example are the ride sharing services, Uber and Lyft. While the services they provide are terrific, the business model falls short on many fronts. Many investors are currently betting that Tesla will be the big winner in the electric car sweepstakes. In fact, Tesla is really sucking all of the air out of the automobile industry from an investor’s standpoint. From a business standpoint, Tesla isn’t making a lot of money, so it’s not the best investment.

  • With hundreds of other stocks out there for investors to buy, I think it is smart to put your money elsewhere and avoid Tesla stock right now.
  • Even more impressive was Tesla’s 17.7% net income margin, placing it among the best in the auto industry.
  • Toyota recently recalled its first mass-produced electric vehicles — 2,700 total — less than two months after they launched.
  • «Everybody’s feeling better that the Fed is no longer raising rates, they’re going to eventually be cutting rates, inflation is coming down,» Adam said.

That’s up from about $5 billion in 2021 and just $2.7 billion in 2020. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. The Motley Fool owns and recommends Alphabet (A shares) and Tesla. Tesla’s growth outlook isn’t bad at all, but it still seems clear that growth will slow down over the years, and with a 25% expected growth rate in 2023 Tesla isn’t an absolute growth monster. Expected growth for some other EV players is significantly higher, including NIO, which is expected to grow by 45% in 2023, according to YCharts. The result was a record non-GAAP net income for the EV company, surpassing $1 billion for the first time ever in a quarter.

Is Now a Good Time to Buy Tesla Stock?

Growth traders and investors will tend to look for growth rates of 20% or higher. That does not mean that all companies with large growth rates will have a favorable Growth Score. But, typically, an aggressive growth trader will be interested in the higher growth rates.

is tesla a good buy

In spite of that, Tesla is doing things against the masses who want to see them fail, revolutionizing an industry that has been resistant to change and slow to adopt new technologies. For some people that aspect will count for more than a difference in the price tag. But if you’re looking for a more affordable electric vehicle, you might consider the Nissan Leaf or the BMW Mini Cooper SE.

Tesla Could Be a Good Long-Term Buy

If Tesla is unable to keep key employees, such as CEO Elon Musk, its favorable brand image could decline. Should the company not be able to retain production line employees, it could see delays. We see a low probability but moderate materiality for both risks. The world is gravitating towards electric vehicles at the moment, and, when people pick one up, they obviously want to have the very best. No matter what, Tesla is still considered to be the top of the range option. They forget that Lynch also emphasized that those companies must have a sustainable business model and be attractively priced.

  • While the one year change shows the current conditions, the longer look-back period shows how this metric has changed over time and helps put the current reading into proper perspective.
  • Even in beta, the software upgrade costs Tesla owners a whopping $12,000.
  • Tesla (TSLA -0.42%) is one of the most popular stocks among investors right now.
  • The average analyst estimate for 2023 revenue is $106 billion, which would be around double what it brought in last year.

Investors like this metric as it shows how a company finances its operations, i.e., what percentage is financed thru shareholder equity or debt. A ratio under 40% is generally considered to be good.But note; this ratio can vary widely from industry to industry. So be sure to compare it to its group when comparing stocks in different industries. Current Cash Flow Growth measures the percent change in the year over year Cash Flow. Cash Flow is net income plus depreciation and other non-cash charges. A strong cash flow is important for covering interest payments, particularly for highly leveraged companies.

More From InvestorPlace

Zacks’ proprietary data indicates that Tesla, Inc. is currently rated as a Zacks Rank 4 and we are expecting a below average return from the TSLA shares relative to the market in the next few months. In addition, Tesla, Inc. has a VGM Score of D (this is a weighted average of the individual Style Scores which allow you to focus on the stocks that best fit your personal trading style). Its Value Score of D indicates it would be a bad pick for value investors. The financial health and growth prospects of TSLA, demonstrate its potential to underperform the market.

Some of the items you’ll see in this category might look very familiar, while other items might be quite new to some. The detailed multi-page Analyst report does an even deeper dive on the company’s vital statistics. It also includes an industry comparison table to see how your stock compares to its expanded industry, and the S&P 500.

TSLA Bears Say

When comparing this ratio to different stocks in different industries, take note that some businesses are more capital intensive than others. A D/E ratio of 2 might be par for the course in one industry, while 0.50 would be considered normal for another. So it’s a good idea to compare a stock’s debt to equity ratio to its industry to see how it stacks up to its peers first. The Earnings Yield (also known as the E/P ratio) measures the anticipated yield (or return) an investment in a stock could give you based on the earnings and the price paid. The Price to Cash Flow ratio or P/CF is price divided by its cash flow per share.