2 Reasons to Buy Tesla Stock Before it Skyrockets

Motley Fool2023-05-07

With Tesla shares up nearly 50% so far in 2023, it's clear that many investors are regaining their optimism about the electric vehicle maker. But the question remains whether or not the company can ...

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Comments

runningjames
2023-05-08
runningjames
Just buy if dip below 150!
Daihard79
2023-05-07
Daihard79
Read these articles with a pinch of salt
Andrew cub
2023-05-07
Andrew cub
Last article said sell,now said buy?
Pottsy
2023-05-07
Pottsy
The biggest risk to Tesla is Elon finding some else to catch his
CIG
2023-05-07
CIG
Most of those foxl recommendations are "buy", even valuations are still high.

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But the question remains whether or not the company can ...</p>\n\n<a href=\"https://www.fool.com/investing/2023/05/06/2-reasons-to-buy-tesla-stock-before-it-skyrockets/\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"TSLA","symbol_name":"特斯拉","start_time":0,"source_url":"https://www.fool.com/investing/2023/05/06/2-reasons-to-buy-tesla-stock-before-it-skyrockets/","article_id":"2333467055","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2333467055","pubTimestamp":1683425085,"sourceInfo":{"source_id":"fool_stock","name":"Motley Fool"},"weMediaInfo":null,"summary":"The automaker's bull run might be just getting started.","collect":0,"end_time":0,"defaultTopTitle":"fool.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"TSLA":"特斯拉"},"translate_title":"在特斯拉股票暴涨前买入它的两个理由","themeId":"","isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"TSLA":1},"content_text":"With Tesla shares up nearly 50% so far in 2023, it's clear that many investors are regaining their optimism about the electric vehicle maker. But the question remains whether or not the company can maintain its rally amid fears of margin pressure and increased competition. Let's explore why these near-term challenges could be long-term opportunities. 1. Tesla's margins remain fantasticOne of the things that set Tesla apart from most other automakers is its margins, which tend to be high for the industry. In 2022, the company generated total revenue of $81.5 billion compared to an operating income of $13.7 billion, a margin of 16.8%. For comparison, Tesla's large (majority gasoline-powered) U.S. rivals like Ford and General Motors generally have margins in the single digits. There are several explanations for Tesla's incredible profitability. For starters, the company's recognizable brand means it doesn't have to spend money on advertising and promotion. Management has also worked to unlock manufacturing efficiencies and vertical integration -- expanding its battery manufacturing capacity and bypassing dealership networks by selling cars directly to customers. All this means better margins and bigger profits for the company. 2. Price war fears are overblownSome Wall Street analysts fear that Tesla could eventually lose its margin advantage because of a recent spate of price cuts. While the company actually raised U.S. prices (by a measly $250) in May, this follows price reductions of around 20% globally by the start of the year. That said, investors should focus on the big picture.Electric vehicles (EVs) represented just 10% of new car sales in 2022. And Goldman Sachs estimates that this number will soar to 61% by 2040. 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Much of its operational cost savings will likely be passed on to consumers to maximize market share, leading to better economies of scale and more cost savings in the future. This strategy could reward investors much more than a low-volume, higher-margin model. With a price-to-earnings multiple of 42, Tesla's stock trades at a premium valuation compared to the S&P 500 average of 24. 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