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How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.
Another factor that can influence investors is FOMO, or the fear of missing out, especially with tech giants and popular consumer-facing stocks.
What if you'd invested in Tesla (TSLA) ten years ago? It may not have been easy to hold on to TSLA for all that time, but if you did, how much would your investment be worth today?
Tesla's Business In-Depth
With that in mind, let's take a look at Tesla's main business drivers.
Over the years, EV maker Tesla has evolved into a dynamic technology innovator. It has transformed the EV market much the same way as Amazon changed the retail landscape and Netflix revolutionized entertainment. Tesla is the market leader in battery-powered electric car sales in the United States, owning around 60% of market share. In fact, the company’s flagship Model 3 accounts for about half of the U.S. EV market. Tesla, which has managed to garner the reputation of a gold standard over the years, is now a far bigger entity that what it started off since its IPO in 2010, with a market capitalization almost double the combined value of top two U.S. auto giants General Motors and Ford.
Over the years, Tesla has shifted from developing niche products for affluent buyers to making more affordable EVs for the masses. The firm’s three-pronged business model approach of direct sales, servicing, and charging its EVs sets it apart from other carmakers. Tesla, which is touted as the clean energy revolutionary automaker, is much more than just a car manufacturer. The firm also makes different kinds of technology like self driving software, charging stations and battery development, et al. The technology titan has also made inroads into solar and energy storage business.
Tesla operates under two segments: Automotive and Energy Generation & Storage. While Automotive and Energy Generation/Storage operations accounted for 86.4% and 6.3% of the total sales in 2020, respectively, revenues from Services and Others constituted the rest.
Presently, the company produces and sells three fully electric vehicles: The Model S sedan, the Model X sport utility vehicle (“SUV”) and the Model 3 sedan. Tesla’s equally impressive future product lineup includes Cybertruck, Semi truck and Roadster. The firm manufactures its vehicles primarily at facilities located in Fremont, California, Lathrop, California, Tilburg, Netherlands. Tesla’s first, second and third Gigafactory are located in Nevada, New York and Shanghai, respectively. While production in these three factories are going on a full swing, production from Tesla's 4th and 5th Gigafactory in Berlin and Austin, respectively, is expected to begin this year.
Putting together a successful investment portfolio takes a combination of research, patience, and a little bit of risk. For Tesla, if you bought shares a decade ago, you're likely feeling really good about your investment today.
A $1000 investment made in August 2011 would be worth $130,466.91, or a gain of 12,946.69%, as of August 4, 2021, according to our calculations. This return excludes dividends but includes price appreciation.
The S&P 500 rose 250.95% and the price of gold increased 5.51% over the same time frame in comparison.
Looking ahead, analysts are expecting more upside for TSLA.
Tesla hit a milestone in second-quarter 2021, with quarterly profits topping $1 billion for the first time. Riding on robust Model 3/Y demand, the electric vehicle (EV) behemoth achieved record production and deliveries despite chip crunch. Construction of Berlin and Texas gigafactories are well on track, with production expected to commence this year. While Tesla’s high range vehicles, superior technology and software edge bode well, it is far from immune to the global microchip deficit, which is likely to weigh on the firm’s near-term prospects. Massive capex owing to capacity investments in gigafactories and the development of battery tech might strain near-term financials. Waning margins for Model S/X, and delays in Semi and Cybertruck launch act as spoilsports. Thus, investors are recommended to wait for a better entry point.
The stock is up 7.60% over the past four weeks, and no earnings estimate has gone lower in the past two months, compared to 9 higher, for fiscal 2021. The consensus estimate has moved up as well.
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