The recent stock sell-off is picking up momentum, and the stock market is experiencing a significant downturn today. Stocks of the electric car manufacturing giant Tesla (TSLA), which surpassed a trillion-dollar valuation in the past year, have also witnessed a reversal of sorts in 2022. However, some analysts are highly bullish of the company’s earnings for the coming years and are predicting a turnaround for Tesla.
Investors are wondering whether they should take this opportunity to load up their shares in TSLA, as Elon Musk has defied big odds and consistently beat expectations. So, is Tesla a good buy now? Let's see.
Tesla Stock: An Overview
Robust fundamentals would resuscitate Tesla shares, making TSLA one of the top stocks to invest in.
Tesla is a one-of-a-kind American electric vehicle and clean energy company led by a visionary CEO, Elon Musk. As a company, Tesla has reaped massive gains and popularity since its inception. 2021 has been a record year for Tesla, delivering almost 936,000 electric vehicles, marking a record high. Its latest earnings report suggests that the company also has the best-operating margins among electric vehicle (EV) manufacturers. Precisely, the company ended the year with a solid 83% year-over-year growth in production with almost 1 million cars. With its record-breaking number of EVs, the management also expects delivery to grow at an average annual rate of 50% in the coming years.
Alongside, after spending over $11 billion in capital expenditures, Tesla also delivered its second profitable year under generally accepted accounting principles (GAAP) and free cash flow of $5 billion.
Tesla thus has been an investor’s favorite over the years as it is hard-pressed to find a stock that efficiently checks all the boxes; attractive growth, a strong history of consistent wins, disruption, decarbonization, quality, and many more. These robust fundamentals will help strengthen Tesla’s position as one of the top stocks to buy now.
The Massive Potential Of Tesla Stock
Tesla has plans to focus on growing production volumes on existing models at its current and new factories, boosting TSLA’s investability quotient.
TSLA seems to be a good buy despite the current market drop. In 2022, Tesla has expanded its global reach and production rates. The company received approval to begin commercial production at its new factory near Berlin. It can produce up to 500,000 vehicles per year. The plant will also produce the bulk of Tesla’s vehicles destined for European customers, starting with the Model Y crossover SUV.
Moreover, the rising earnings estimates and the consequent rating upgrade for Tesla show a huge improvement in the company’s underlying business. This would be a significant push for the stock, making TSLA a potential investment option.
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Is TSLA A Good Buy Now?
Tesla aims to keep delivering blockbuster growth for the foreseeable future, making the stock a good buy.
Tesla’s relentless focus on driving down costs through new batteries, product localization, scale, and efficiency continues to be strong quarter after quarter. With this year’s expansion and improvements, this will further accelerate. Although there are multiple competitors in the EV space, Tesla will continue to dominate the market share with its high-end technology and professional team.
Moreover, with the massive expansion of its manufacturing capabilities, TSLA stocks seem to be a profitable buy now for future returns. Musk also wants to build 20 million electric vehicles a year over the next decade, which will boost the price of TSLA stocks tremendously. This is more than double the current production of other auto-making giants, and the team is dedicatedly working to achieve this target.
However, one of the most encouraging aspects of the current market correction in Tesla is that long-term investors have an option to buy TSLA for a relatively affordable price.
With Musk at the helm of the company and a strong team, Tesla sales would comfortably grow above 50% in 2022 despite supply chain problems. Thanks to their new factories and current plants boosting output, the stock price would reach new highs this year, making Tesla a good buy now for future returns.
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