Is Tesla Stock A Buy

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Is Tesla Stock A Buy

Is Tesla (Tsla) Stock Still A Buy?

Should you really buy the Tesla (TSLA) stock now that it has gained 67% this year? If we look at the stock price aside, Tesla (TSLA) as a company isn't doing great!

Tesla had a series of bad events, including more competition, falling sales, and the cancellation of tax credits. Normally, that's a bad thing and also leads to a decline in the share prices.

Tesla (Tsla) Valuation Is Unrealistic

But, Tesla stock is different in this regard as it has not only avoided a drop but actually registered growth. So in that sense, we can safely say that Tesla (TSLA) is a special type of stock.

The current market cap of Tesla (TSLA) is around $1.3 trillion. But if you look closely, such a high valuation doesn't make sense, and it never did in the past.

Right now, the Tesla (TSLA) share is trading at 346 times earnings, which is way too high. For example, the number for Ford is only around 15.

So, there's no doubt in the fact that Tesla (TSLA) is very overvalued despite what the share price tells us. But, it's also a reality that investors just love buying Tesla (TSLA) stock even if the core business is struggling.

That's why, when we look at Tesla (TSLA) stock, we must understand that it can't be evaluated like any other stock!

If we look back, Tesla (TSLA) has proven multiple times that it can keep earning money once someone makes their first purchase. For example, Tesla (TSLA) has been selling software packages to its customers.

Also, Tesla (TSLA) is looking into opening a new income stream by offering robotic products. Although it is still in early stages, it could become a scalable business model.

With all things considered, it's clear that Tesla (TSLA) stock is way too expensive to get an entry. But if you are willing to take the risk, you could also stand to secure some outsized gains.

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