Should you BUY TESLA (TSLA) Stock?
In today's blog we're going to be seeing if Tesla is a buy. Over the past couple of weeks Tesla had excellent performance climbing from $1,500 to over $2,000. A lot of people want to get into the stock because there is a ton of long-term potential. Also a lot of people want to get into this stock before the 5 to 1 stock split.
Tesla's Year-to-date return is a whopping 378.53%. If you guys would have invested $10,000 January 1st you wouldn't be standing With around $47,853 in your account in under one year. This is obviously outperforming the S&P 500, Dow Jones in the NASDAQ.
Tesla’s margin is extremely low with 1.43%. This means for every hundred dollars that Tesla brings in as Revenue they profit $1.43. Now if you compare that to Visa (V), Visa has a profit margin of around 52%, this means for every hundred dollars that Visa brings in as Revenue they profit around $52. I always like to look for stocks that have a profit margin around 20%.
Tesla has a price to earnings ratio as of August 20th 2020 is 1040 2.62, I understand that Tesla is a growth stock but this is stating that Tesla is growing at a rapid rate and for every dollar you invest you are paying $1,000 for earnings .
With low margins and high price-to-earnings ratio says we must have to have excellent Revenue to keep up with this stock, but surprising Tesla's revenue for the quarter ending in June 30th 2020 was 6.036 Billion dollars, a 4.9% decline year-over-year.
In my personal opinion I do think that Tesla has a ton of emotion in the stock right now. A lot of people want to invest in the company because they missed out on previous opportunities with that stock. and with the stock split coming up there using that as the fundamental catalyst so they can invest. Personally, I think the fundamentals are going to slowly start catching up with Tesla. with low earnings is something we have to be worried about and extremely low profit margins as well. Tesla does have a ton of long-term potential in the electric auto space they make up for most of electric automobiles market share, when people want to buy an electric vehicle one of the first companies that comes to mind is Tesla and I think that is a key feature about their business.