How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.
Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.
What if you'd invested in Tesla (
TSLA Quick Quote TSLA - Free Report) ten years ago? It may not have been easy to hold on to TSLA for all that time, but if you did, how much would your investment be worth today? Tesla's Business In-Depth
With that in mind, let's take a look at Tesla's main business drivers.
Over the years, EV maker Tesla has evolved into a dynamic technology innovator. It has transformed the EV market much the same way as Amazon changed the retail landscape and Netflix revolutionized entertainment. Tesla is the market leader in battery-powered electric car sales in the United States, owning around 60% of market share. In fact, the company’s flagship Model 3 accounts for about half of the U.S. EV market. Tesla, which has managed to garner the reputation of a gold standard over the years, is now a far bigger entity that what it started off since its IPO in 2010, with a market capitalization almost double the combined value of top two U.S. auto giants General Motors and Ford.
Over the years, Tesla has shifted from developing niche products for affluent buyers to making more affordable EVs for the masses. The firm’s three-pronged business model approach of direct sales, servicing, and charging its EVs sets it apart from other carmakers. Tesla, which is touted as the clean energy revolutionary automaker, is much more than just a car manufacturer. The firm also makes different kinds of technology like self driving software, charging stations and battery development, et al. The technology titan has also made inroads into solar and energy storage business.
Tesla operates under two segments: Automotive and Energy Generation & Storage. While Automotive and Energy Generation/Storage operations accounted for 86.4% and 6.3% of the total sales in 2020, respectively, revenues from Services and Others constituted the rest.
Presently, the company produces and sells three fully electric vehicles: The Model S sedan, the Model X sport utility vehicle (“SUV”) and the Model 3 sedan. Tesla’s equally impressive future product lineup includes Cybertruck, Semi truck and Roadster. The firm manufactures its vehicles primarily at facilities located in Fremont, California, Lathrop, California, Tilburg, Netherlands. Tesla’s first, second and third Gigafactory are located in Nevada, New York and Shanghai, respectively. While production in these three factories are going on a full swing, production from Tesla's 4th and 5th Gigafactory in Berlin and Austin, respectively, is expected to begin this year.
While anyone can invest, building a lucrative investment portfolio takes research, patience, and a little bit of risk. If you had invested in Tesla ten years ago, you're probably feeling pretty good about your investment today.
A $1000 investment made in October 2011 would be worth $150,272.73, or a gain of 14,927.27%, as of October 18, 2021, according to our calculations. This return excludes dividends but includes price appreciation.
In comparison, the S&P 500 gained 265.13% and the price of gold went up 1.27% over the same time frame.
Analysts are forecasting more upside for TSLA too.
Shares of Tesla have outperformed the industry over the past year. The company hit a milestone in second-quarter 2021, with quarterly profits topping $1 billion for the first time. Riding on robust Model 3/Y demand, the electric vehicle (EV) behemoth achieved record production and deliveries despite chip crunch. With China being the biggest EV market, Tesla’s Shanghai factory is buoying the company's revenue prospects.Construction of Berlin and Texas gigafactories are well on track, with production expected to commence this year. Along with increasing automotive revenues, Tesla’s energy generation and storage revenues are also boosting earnings prospects. Robust free cash flow (FCF) along with low leverage is another tailwind for Tesla. Thus, the stock warrants a bullish stance right now.
Over the past four weeks, shares have rallied 11%, and there have been 7 higher earnings estimate revisions in the past two months for fiscal 2021 compared to none lower. The consensus estimate has moved up as well.