22% decrease in more than a week, Tesla (NASDAQ: TSLA) appears to be acting more like a penny share than a company that earned nearly $100 billion in revenue last year. Still, I have already seen the possibility of adding Tesla stock to my portfolio for some time now. So can this latest crash provide the kind of purchase opportunity I’ve wanted?
What I like about Tesla
My answer depends on the price. First, I need to explain why I like the idea of owning Tesla stock.
The company is mostly over 20 years ago. But it already builds a massive global manufacturing and sales footprint for electric vehicles. Sales fell slightly last year (and that decline accelerated this year), but remained quite a bit.
I think Tesla’s recent history points to two important factors.
First of all, it is a serious candidate in the field of electric vehicles. It’s a competitive field, and Tesla risks rivals like byd It leaves it with its strengths, such as its unique technology, vertically integrated business models, and unique design.
The second point also jumps out of Tesla’s development to me. It demonstrates its expertise in not only imagining new products, but also bringing them to the market at scale and at a rapid pace. This is what we do in the electricity storage sector, which had a very strong first quarter, unlike the automotive business.
Such expertise will help Tesla take advantage of some of the other ideas between its drawings and widespread real-world use, from automated taxi fleets to robotics.
Tesla stock prices aren’t that positive!
That’s important because Tesla stock seems so overvalued to me, as it is purely considered a car company.
As far as I’m concerned, the only possible justification for the current rating, let alone a higher rating, is the possibility of planning for companies outside the electric vehicle business.
But that’s where I began to feel serious concern about the valuation, even after the recent crash in Tesla stock.
The electricity storage business is growing rapidly, but I don’t think that even with the automotive business, the joint valuation should be near $900 million.
Meanwhile, the other ideas are very speculative for now. That’s not yet clear if they’re commercialized on scale, if they’ve ever been commercialized on scale. So, no matter how big the long-term potential is, I think it’s difficult to justify anything more than a rather modest assessment at this point.
Considered the sum of parts, I don’t think Tesla is worth its market capitalization. So the share is cheaper than it was a few weeks ago, but it’s still too expensive to consider buying it.
