shares in this article
• Tesla stock with a strong downside in the first half of the year
• Experts see the long-term potential of Tesla’s shares
• Low valuation as a good starting point?
Electric car maker Tesla recently released Q2 delivery data and had to report a decline compared to Q1 2022. Following the shutdown of the Shanghai plant due to China’s Corona policy and ‘supply chain challenges’, last quarter’s only handed over to customers 254,695 electric cars. Rising commodity costs, slowing economic growth and high inflation are also likely to be problems for Tesla. For example, high inflation rates mean that households have less money to spend on luxury goods such as Tesla’s electric cars because they have to spend more on food and energy. “Tesla is not immune to everything that happens in the macro,” said market expert Gene Munster, according to Bloomberg. This is also clearly reflected in Tesla’s share price: in the first half of the year, the NASDAQ-listed newspaper depreciated about 35 percent and lost about $ 350 billion in market capitalization. However, this should not deter long-term investors. Instead, you should see the decline as a good opportunity to buy Tesla shares, experts say.
Exposure to Tesla stocks as a long-term bet
Just a few weeks ago, Garrett Nelson, senior vice president and stock market analyst at CFRA, described the fall in Tesla stock prices as “a generational opportunity for investors” in relation to long-term business prospects. Now Robert Schein, CIO at Blanke Schein Wealth Management, is another expert who shares this view. “Six months ago, Tesla was judged to be excellence, but now it looks like a very attractive entry point for long-term investors,” Schein told Bloomberg. He is confident Tesla’s stock will again approach the $ 1,000 mark in the next twelve months. The paper was so high recently in April, and Tesla shares recently closed at $ 699.20 (closing on July 5, 2022).
Schein justified his optimism by saying that problems in supply chains should ease in the coming months and that Tesla would continue to improve its balance sheet. During the last official presentation of the balance sheet, Tesla convinced with strong sales and profits growth that the profit margin was a good 19 percent. According to industry expert Ferdinand Dudenhöffer, Tesla was the most profitable car maker in the world after Ferrari and had the highest profit margin among manufacturers selling more than 15,000 vehicles.
Also planned to take over Twitter Elon Musk, whose numerous changes have also impacted Tesla’s share price, should be completed one way or another in the next 12 months, Schein believes. It should also allay some investors’ fears that Tesla boss Elon Musk might be too distracted from his main company.
Gene Munster also believes Tesla shares should be an interesting bet for long-term investors – not only because of the electric vehicle business, but also because of the other technologies Tesla is working on. According to Bloomberg, Munster explicitly named the humanoid robot Optimus. “There is probably a one in ten chance that Optimus will work, but if it does, it will be significant,” Munster said, adding Tesla would have something other car makers like Ford and General Motors couldn’t offer.
Some key figures at Tesla still call for caution in the short term
Grace Capital CIO Catherine Faddis also believes Tesla shares may be close to a buy recommendation. “The stock has plunged by more than a third, and given its extreme valuation at 14 times previous gains, no one knows whether to buy more or sell it right away,” said Faddis Bloomberg. However, due to the huge price loss, the paper is probably closer to purchase, according to Faddis. As reported by The Motley Fool, the price-to-sale ratio for Tesla is currently 12.9. However, over the past five years it has averaged just 9.9 and 1.4 at its lowest, which places the stock still above the five-year average in terms of price-for-sale. On the other hand, according to Bloomberg, Tesla shares are currently trading at around 59 times expected profits, which is close to their lowest level since mid-2020.
So there is some potential, but Tesla stocks may not be suitable for every investor at the moment, warns Bloomberg. Because in the short term, the turbulence to which the paper is exposed and the high volatility will not change.
Editors of finanzen.net
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