Dean Mouhtaropoulos/Getty Images News tesla, inc. (nasdaq:tsla) is one of the most controversial and most followed stocks on the alpha search with over 980,000 followers. Reading: Will tesla stock hit 1000 all investors are aware of the skyrocketing price of tesla since it went on the market in 2010. If we look at the price action of the last 12 months, we can easily see that for most of this period, tesla was in a range of $600 to $800 per share, except for the period from last October to the end of October. January when it was above $1,000 and, in fact, briefly above $1,200. MarketWatch I previously wrote an article describing tesla’s drop below $1,000 “why tesla stock is falling and what should investors consider?” In this article, I’ll discuss when, how and if tesla could rally above $1000. If we look at tesla’s financial metrics comparing 2020 to 2021, we see some huge improvements in the metrics. Seeking Alpha and author Looking at the stock price on line 1, we see that the price has risen 50%, a significant increase for any stock over a one-year period. but revenue (line 3) is up 69%, so the price doesn’t seem overstated on that basis. but look how much better tsla did in three key areas: 1. gross margin (line 4) increased 100% from $7 billion to $14 billion. that’s an impressive performance. See also: Top 30 best movie theater stocks best today 2. line 10 eps (earnings per share) increased 657%, making a 50% increase in stock price seem more than reasonable. in fact, despite the 50% price increase, the pe ratio (line 11) fell by 80%. 3. 2021 ebitda (line 13) increased 121% compared to 2020, another solid benchmark to watch. so what can we deduce from all these positive metrics? that tesla was overpriced in late 2020 or is now underpriced in 2020. Large price swings are nothing new for tesla. if we only look at the last two years since February. From 2020 we can count 11 major swings, both up and down, approaching 25% or more movement in short periods of time. NASDAQ and author So, is price volatility related to the broader market? not really. when comparing tesla to the more tech-oriented s&p 500 (spy) and nasdaq (qqq) over the past two years, it shows very little correlation. tesla seems to dance to the beat of its own drummer. MarketWatch one possible reason is that competition around the world seems to be increasing even though ev growth has so far been high enough to offset the gains of competitors. But in any business environment, competition will eventually cause problems and often drive down margins. then perhaps the market is anticipating future problems due to competitive pressures that may or may not come to fruition. See also: Top 30 at&t or verizon stock best now Statista Looking at the financial metrics in the first item of this article, I would have to say that Tesla had a spectacular 2021. and if he can continue to grow his margins and profit anywhere near last year’s level, it will definitely be over $1,000. could argue for a bullish breakout similar to what we saw last year after tsla stalled in late 2020 through spring 2021, as seen in the first gray box. then basically did nothing for six months and then increased over 200 points in two months, as seen in the second gray box. so i would say look towards late summer 2022 to see if tesla price is recovering in a similar pattern. if so, a quick jump above $1,000 or even the previous high of $1,257 could occur. NASDAQ and author As I’ve said many times before, betting against Elon Musk and Tesla has been foolish and I’m not going to do it now. but there are significant potential issues that need to be factored into the investment decision calculus when deciding whether to invest in tesla now. 1. Inflation appears to be a longer-term problem than previously thought, and as such will at some point cause people to postpone major purchases such as new cars. In addition, Tesla prices are considerably higher than the equivalent ice car (internal combustion engine), so there could also be some changes from electric vehicles to ice vehicles for those who decide to buy. 2. The ongoing chip shortage doesn’t seem to have a short-term solution, so it could affect electric vehicles, especially given the much larger number of chips used in each vehicle. that could result in delivery delays. 3. The market itself has been rising fairly steadily for the last five years and at some point, probably sooner rather than later, there will be a major reset and high pe stocks like tesla are usually the hardest hit by those declines. 4. And as mentioned above, increased competition may make it more difficult for Tesla to maintain its current margins, leading to a reduction in PE ratio and stock price. Due to the issues listed above, I have an expected tesla rating. See also: Top 20+ is dutch bros on the stock market best
key tsla stock metrics and what they portend for the future
why have tesla shares been falling?
can tesla stock hit $1,000 again?
Are tsla shares buy, sell or hold?
