Should You Buy Tesla Stock?

PUBLISHED Jun 29, 2022, 12:59:46 PM        SHARE

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imgRashada Parveen

The stock market is in a downward spiral, investors are losing the confidence and at the same time, there is one thing calling for the opportunity to buy the highly valuable and long-buy stocks. The Tesla Stock Price is at the nearly lowest level and it is a great opportunity to confront the question of should you buy Tesla stock right now or after the tesla stock split.

Here, we will guide you on why should you buy Tesla stock and why is it the right time. Moreover, we discuss the next Tesla Stock Split.

If you are interested in dividend-paying stocks, read my stock analysis on Sempra Energy Stock Dividend, SRE stock Forecast and Why is Apple Dividend So Low?

Tesla Profile

Elon Musk co-founded Tesla Motors in 2003 and became the CEO of Tesla Inc. in 2008 holding the majority of the shares. Based in Texas, this automotive industry manufactures electric vehicles and provides clean energy solutions to meet the ever-changing demands for building a sustainable future.

Tesla made history and everybody, interested in investment and Electric Vehicles, is aware of Tesla – a giant in the auto industry. With the idea to revolutionize the auto industry with clean energy, Tesla Inc. was founded in 2003. Since then, Tesla has made many breakthroughs by developing its different vehicle models including Model S, Model Y, Model X, Tesla Semi and Cyber Truck.

Besides vehicle production, Tesla has set their foot into sustainable energy solutions. By creating in-house cell production and controlling the supply chain, Tesla made the production processes more efficient and reliable.

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But Tesla is not supposed to stop here. This futuristic corporation is striving to build the most affordable electric vehicle yet. Artificial Intelligence combined with innovative ways to accelerate the production level is meant to bring clean energy solutions to the world at the most affordable rates.

Why Should You Buy Tesla Stock?

Tesla investors have always boasted about the highest share price and the valuation of the electric vehicle company. The market capitalization of Tesla stands at $723.39 billion. The current Tesla Stock price, $697.99 is moving close to the 52-week lowest price of $620.46. The highest price of this clean-energy stock reached as high as $1,243.49.

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With the current P/E ratio of $94.34, Tesla revealed its first-quarter earnings in March 2022. According to this financial report, Tesla made records again with a record increase in sales by 81% year-on-year basis. On the other hand, the net profit margin has been reported as high as 319% YoY basis with a 17.69% increase in the first quarter of 2022.

Earnings Per Share (EPS) for Q1 2022 were reported at $3.22 against the expected EPS of $2.26, with an EPS beat of 42.31%.

In the current economic slowdown and the recession-like situation, the prices of nearly every stock are sliding. Tesla Stock Price has also fallen due to various reasons including the disruptions in the production in Shanghai due to Covid-19 restrictions.

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But the analysts are providing a positive outlook on the third and fourth quarterly earnings. This is due to the increase in the production and delivery of electric vehicles as more people are expected to move toward electric vehicles as a result of the gasoline price hike.

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On the other hand, the first-mover advantage and in-house production of the assembling parts can beat the rising competition amid the rising challenges in the auto industry.

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So, we can say that the quarterly earnings will drop in the next quarter, but the investors can buy the stocks of this automotive corporation as it is at the lowest level and it will rise after the stocks have been split.

When Will Tesla Stock Split?

Tesla Stock split is expected in August this year. Elon Musk, CEO of Tesla, announced on 10th June a stock split of 3-for-1 to make it increase the reach and access of more investors.

Although, the stock has already made a stock split of 5-for-1 in 2020, the Tesla stock split increased the Tesla share price by a whopping 743% that year. We expect the same as a result of the stock split this year as Tesla Stock Price has already dropped by 41.82% this year.

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The announcement of yet another stock split reflects the confidence of the electric vehicle corporation in the higher price. Although the Q2 2022 earnings of Tesla will be reduced as a result of production disruptions in Shanghai due to the Covid-19 restrictions.

The most anticipated stock split will be performed in the form of a stock dividend. Put it simply, if you own one share of Tesla, you will be rewarded two additional shares as a result of this stock split.

Final Thoughts

Lastly, we can say that it is high time to buy Tesla stock as it is at the lowest level in the present bearish trend in the market. With a long-term investment outlook, the shareholders can enjoy the profits and high prices for years to come as Tesla is continuously bringing innovations in electric vehicles and sustainable energy solutions.

Read Also: Bank of America Stock Price Today - BAC Making Huge Revenues in a Bear Market and NextEra Energy Stock (NEE)

Are you still worried about why should you buy Tesla Stock? Tesla Stock has been reported as fairly valued as reported by the Morning star analyst. You can buy the stock at a low price and enjoy the stock split later in August this year.

TSLA, Big Buy

Tesla Inc
Return: 42.51%

TSLA, Big Buy

Return: 42.51%


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