Tesla – a great long-term stock for investors?

Among the famous automakers, Tesla’s brand name definitely stands out. The company pioneered with the electric cars, an innovation that is going to shape the whole industry once and for all. Tesla cars can do the stuff that other cars can only dream about. Thanks to the autopilot feature, now the car is able to pick you up near the bar and drive you home safely, even if you are drunk as fuck. The future is at the doorstep, and Tesla helps to make it closer to us.

Although Elon Musk is an absolute boss and a visionary CEO, there is still a bit of doubt surrounding Tesla’s money making capabilities. Nonetheless, we believe that the decision to invest in Tesla shares can pay off substantially in the future.

Tesla IPO time and after

Tesla went public in 2010, with the stock being initially priced at $17 per share on NASDAQ.  If you put your hard-earned monies into Tesla at its IPO, you would swim in the pool of cash. The stock soared in 7 years by over 2000% and it was growing steadily with just a few major downturns. Now TSLA is priced at $348 per share, it’s fucking nuts. Moreover, Tesla’s market cap is $58 billion, which is even higher than Ford or BMW.

The biggest shareholder of Tesla is, not surprisingly, Elon Musk with the 22% stake in the company. Other notable shareholders include Elon’s brother Kimbal and the company’s CTO Jeffrey B. Straubel.

Tesla’s criticism: Are TSLA fundamentals that bad?

Despite the fascinating plans to get the dominating market share in the car industry, Tesla has been suffering from losses for the last years. The fact that Tesla is the second most shorted stock after Alibaba is damn upsetting. Yet there is no smoke without a fire.

When looking at Tesla’s fundamentals, you will find out that the company has a negative EPS of $-4.72. The operating loss dropped from -20% last year to -9% in Q2 2017, but still this is just a slight improvement. Tesla also recently reported the negative cash flow of $1.16 billion, which is an obvious burning of cash.  Overall the company incurred the net loss of $336 million which higher than the previous year figure. As for the revenue, it grew from $1.27 billion to $2.79 billion in just a year.

Why Tesla still is a great buy?

Despite what fucking Tesla haters and skeptics say about the company, Tesla stocks investment is still a nice opportunity. The company did not reach the break-even point yet, but it is on the right track. More and more car manufacturers, like Volvo, are turning to the production of their own electric cars. Nonetheless, Tesla will remain the reigning king and here is why.

Tesla is planning to make its products more affordable. True, Model S roughly priced around $100,000 is not what an average millennial can buy. Recently, Elon Musk officially presented its first budget Tesla car – Model 3. In the nearest future, this car is going to be the main profitability driver.  What’s more, Tesla is not going to stop just on fancy sedans. Musk already announced the plans to design electric SUVs, heavy-duty trucks, pickup trucks etc.

Tesla almost does not spend money on the marketing. The company and its CEO get the immense media coverage, absolutely free of charge. This gives Tesla an edge when making sales, as there is little need to familiarize potential customers with the new products.

Considering all this, it is definitely worth investing in Tesla and holding the stock for many years to come.

Leave a Reply

Your email address will not be published.