Is It Too Late To Buy Tesla Inc (TSLA)?
Let's talk about the popular Tesla Inc (NASDAQ:TSLA). The company's shares saw a double-digit share price rise of over 10% in the past couple of months on the NasdaqGS. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Today I will analyse the most recent data on TSLA’s outlook and valuation to see if the opportunity still exists. View our latest analysis for Tesla
What is TSLA worth?
According to my valuation model, TSLA seems to be fairly priced at around 5% below my intrinsic value, which means if you buy TSLA today, you’d be paying a reasonable price for it. And if you believe TSLA’s true value is $373.67, then there’s not much of an upside to gain from mispricing. In addition to this, it seems like TSLA’s share price is quite stable, which could mean there may be less chances to buy low in the future now that it’s fairly valued. This is because TSLA’s stock is less volatile than the wider market given its low beta.
Can we expect growth from TSLA?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. However, with an extremely negative double-digit change in profit expected next year, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for TSLA, at least in the near future.
What this means for you:
Are you a shareholder? Currently, TSLA appears to be trading around its fair value, but given the uncertainty from negative returns in the future, this could be the right time to de-risk your portfolio. Is your current exposure to the stock beneficial for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on TSLA, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping an eye on TSLA for a while, now may not be the most advantageous time to buy, given it is trading around its fair value. The stock appears to be trading at fair value, which means there’s less benefit from mispricing. In addition to this, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help crystalize your views on TSLA should the price fluctuate below its true value.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Tesla. You can find everything you need to know about TSLA in the latest infographic research report. If you are no longer interested in Tesla, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
