The Wealthy Investor
Should You Own Tesla Stock?
Tesla, Inc. is an American designer and manufacturer of electricautomobiles, solar panels, and batteries for cars and home power storage. Founded in 2003, the company has quickly become the world’s most recognizable car brands in the world.
Over the last 5 years Tesla has taken the automotive industry by storm. There is no doubt that the company’s CEO, Elon Musk, is both a genius and an innovator. Shares of Tesla (TSLA) have contributed to Musk’s net worth of over $246 billion. No matter how you slice it, that is a lot of money!
But is now the time for you to own Tesla, Inc. (TSLA) stock?
A big segment of today’s upper middle class motorists have fallen in love with the Tesla automobile. Unlike the standard cars on the road, Teslas are highly computer automated and their composition is a series of semiconductor chips and regulatory systems which keep the car on the road and running smoothly.
In this era of electric car dominance, Tesla is absolutely the preferred manufacturer.
Financials
Tesla last released its Q2 2024 earnings on Tuesday, July 23rd, 2024 with quarterly top-line revenue of $25.5 billion, a rise of 2% year-over-year.
Over the last 5 years, the average annual revenue growth rates for Tesla Inc. have been over 31%. This has been driven by not only the sales of Tesla automobiles but by its back-end mechanisms, like Tesla home chargers, including the Tesla Powerwall. A fully installed high level Tesla Powerwall costs about $15,600, including accessories and installation costs.
Tesla’s latest financing options, which offer interest rates lower than most banks, have also helped lure new buyers to purchase a Tesla.
As more and more people are making the commitment to the Tesla ecosystem, Tesla’s revenue will rise and in turn supports a rise in the price of the stock.
All of this said, Tesla stock is a perfect fit for some investors.
However, Tesla stock has been highly volatile over the past 2 to 3 years. Much of the stock’s instability is due to Elon Musk’s personality. While his innovative skills and visionary thinking invoke admiration, his controversial public persona along with a leaning towards anti-semitism and far-right views, have triggered major criticism. This has become even more prevalent since Musk acquired Twitter (now X) in 2022 and basically allowed hate speech to flourish on a world-wide social media platform. With this move he’s polarized the investment industry.
Should you own Tesla shares?
Wealthy Investor students are conflicted. Here’s why:
Some of my students don’t want to support a CEO who has expressed anti-semitic viewpoints.
The other half of my students love the Tesla brand and think the revenue growth will continue to go higher.
