Company Overview
Tesla, Inc. is an American electric vehicle and clean energy company founded in 2003. Led by CEO Elon Musk, Tesla designs and manufactures electric vehicles (EVs), battery energy storage from home to grid-scale, solar panels and solar roof tiles, and related products and services.
The company has expanded rapidly, becoming a leader in the global EV market with its Model S, Model 3, Model X, and Model Y vehicles. Tesla's mission is to accelerate the world's transition to sustainable energy.
Market Cap
$915 Billion
P/E Ratio
136.81
EV/EBITDA
67.2x
Revenue (2024)
$97.69 Billion
Recent Performance
Tesla's stock has fallen approximately 28% in February 2025, with concerns about slowing EV demand, increased competition, and CEO Elon Musk's political activities affecting investor sentiment.
Key Metrics
- 1.79 million vehicles delivered in 2024
- Gross profit margin: 17.86% (2024)
- Operating margin: 7.24% (2024)
- Free cash flow: $3.58 billion (2024)
Investment Recommendation
Mixed outlook with a "Hold" recommendation for most investors. Tesla maintains strong industry positioning but faces increased competition and margin pressure. Long-term growth potential remains solid.
Financial Data
Revenue Trends (2020-2024)
Profit Margins
Revenue Breakdown (2024)
Balance Sheet Analysis
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Current Ratio | 2.03 | 1.73 | 1.53 |
| Quick Ratio | 1.43 | 1.13 | 0.94 |
| Debt-to-Equity | 0.17 | 0.14 | 0.11 |
| Inventory Turnover | 6.68 | 6.00 | 7.80 |
| Asset Turnover | 0.90 | 0.92 | 0.94 |
Cash Flow Analysis
| Metric (in billions) | 2024 | 2023 | YoY Change |
|---|---|---|---|
| Operating Cash Flow | $14.92 | $15.72 | -5.09% |
| Investing Cash Flow | -$18.79 | -$11.29 | +66.43% |
| Financing Cash Flow | $3.85 | -$2.10 | +283.33% |
| Free Cash Flow | $3.58 | $4.36 | -17.76% |
| Q4 Free Cash Flow | $2.10 | $2.07 | +1.45% |
Revenue by Geography (2024)
Market Sentiment
Analyst Ratings
Average Price Target: $346.72
Potential Upside: +27.45%
Recent News Impact
-
Elon Musk's Political Activities
Musk's role in the Trump administration has stirred controversy, potentially impacting consumer sentiment.
-
New Tariffs on Imports
Trump administration tariffs on Canada and Mexico may harm Tesla's supply chain.
-
European Sales Decline
Tesla sales in Germany fell 76% in February following Musk's comments on the country's election.
-
Positive U.S. Sales Data
Strong performance in the U.S. market helping to offset international weaknesses.
Sentiment Indicators
Stock Price Forecasts
* Forecasts based on analyst projections and can vary significantly
Technical Analysis
Price Trends (6 Month)
Moving Averages
Current price ($279.10) is below all major moving averages, indicating a bearish trend.
Oscillators
Oscillators show mixed signals with RSI indicating oversold conditions.
Support & Resistance
Technical Summary
Tesla stock is showing bearish signals based on most technical indicators. The price is trading below all major moving averages, suggesting a downtrend. However, some oscillators indicate oversold conditions, which could signal a potential rebound.
The RSI at 26.47 suggests the stock is oversold, while the MACD remains in negative territory. Support levels around $261 and $251 will be crucial to watch if the downtrend continues.
For traders considering an entry, waiting for confirmation of a trend reversal may be prudent, such as a break above the nearest resistance at $283.42 with increasing volume.
Volume Analysis
Recent trading volume has been above average, indicating strong selling pressure as the price has declined.
Compare Assets
EV Market Share Comparison (2024)
| Company | Market Cap | P/E Ratio | P/S Ratio | EV/EBITDA | Operating Margin | 2024 YTD Return |
|---|---|---|---|---|---|---|
| Tesla (TSLA) | $915B | 136.81 | 8.96 | 66.0 | 7.24% | -33.2% |
| BYD (BYDDY) | $82B | 21.9 | 1.5 | 24.1 | 10.1% | -12.4% |
| Ford (F) | $47B | 6.15 | 0.21 | 7.5 | 3.9% | -7.8% |
| General Motors (GM) | $51B | 6.26 | 0.26 | 7.1 | 4.8% | +22.5% |
| NIO (NIO) | $9B | N/A | 1.7 | N/A | -38.2% | -31.1% |
| Rivian (RIVN) | $12B | N/A | 2.49 | -6.9 | -142.5% | +9.2% |
Production Capacity Comparison
Tesla's production capacity exceeds 1.9 million units annually, with Gigafactory Shanghai (750K), Fremont (650K), Berlin (250K), and Texas (250K).
Operational Efficiency
Tesla maintains strong inventory turnover (6.68x) and asset utilization metrics compared to traditional automakers, though efficiency has declined slightly from 2022-2024.
Competitive Positioning Analysis
Strengths vs. Competitors
- Tesla's vertical integration provides more control over the supply chain and costs
- Advanced software and AI expertise, including over-the-air updates
- Extensive Supercharger network enhances customer experience
- Strong brand recognition and loyal customer base
Challenges vs. Competitors
- Increasing competition from BYD, which offers comparable autonomous driving capabilities at lower prices
- Traditional automakers like Ford and GM leveraging decades of manufacturing experience
- Chinese EVs gaining market share with government support and competitive pricing
- Tesla's aging product lineup compared to rapidly evolving industry offerings
Value Investor Analysis
Intrinsic Value Assessment
| Valuation Method | Estimated Value | % Difference |
|---|---|---|
| DCF (Base Case) | $191.00 | -31.6% |
| Sum-of-Parts | $295.00 | +5.7% |
| Comparable Company | $174.50 | -37.5% |
| Historical Multiples | $223.80 | -19.8% |
Current market price: $279.10
Consensus intrinsic value: $221.08 (20.8% below current price)
DCF Valuation Sensitivity
DCF valuation is highly sensitive to growth rate and discount rate assumptions.
Growth Potential Assessment
Short-Term Growth (1-2 Years)
Tesla is projected to grow earnings and revenue by 22.2% and 15.6% per annum respectively over the next 1-2 years. Near-term growth may be constrained by increasing competition and global economic uncertainty.
Medium-Term Growth (3-5 Years)
Potential catalysts include new model launches, expansion of energy business, and growth in services revenue. The success of Full Self-Driving technology could significantly boost margins and create new revenue streams.
Long-Term Growth (5+ Years)
Long-term growth will be driven by Tesla's position in autonomous driving, robotaxis, energy storage, and potential new product categories. Estimated compound annual growth rate of 15-20% is possible but dependent on technological breakthroughs and market adoption.
Risk Factors
Competitive Risks
Growing competition from established automakers and Chinese EV manufacturers threatens market share and could pressure margins. BYD in particular is narrowing the gap with Tesla in global EV sales.
Regulatory Risks
Changes in government incentives, tariffs, and trade restrictions could impact Tesla's operations and profitability. New tariffs imposed by the Trump administration may harm Tesla's supply chain.
Execution Risks
Tesla's ambitious roadmap depends on successful execution of complex technological initiatives like Full Self-Driving and robotaxis. Delays or technological setbacks could impact growth projections.
Valuation Risks
Tesla trades at a premium compared to traditional automakers. The high valuation implies substantial future growth and leaves little margin for error if the company fails to meet expectations.
Sum-of-Parts Valuation
| Business Segment | Valuation Method | Value ($ per share) | % of Total Value |
|---|---|---|---|
| Automotive | DCF & Multiple | $195.00 | 66.1% |
| Energy Generation & Storage | DCF & Multiple | $53.00 | 18.0% |
| Robotaxi | Probabilistic DCF | $24.00 | 8.1% |
| Humanoid Robot (Optimus) | Probabilistic DCF | $22.00 | 7.5% |
| Services & Other | Multiple | $1.00 | 0.3% |
| Total | $295.00 | 100.0% |
Investment Thesis
SWOT Analysis
Strengths
- Market leader in EV technology and sales
- Strong brand recognition and customer loyalty
- Vertical integration from battery production to software
- Extensive Supercharger network
- Software capabilities and over-the-air updates
- Energy storage business growth (67% in 2024)
Weaknesses
- Declining profit margins (7.26% in 2024 vs 15.50% in 2023)
- High dependence on CEO Elon Musk
- Premium valuation (P/E ratio of 136.81)
- Limited product lineup compared to competitors
- Service network limitations in some regions
- Increased political controversy affecting brand image
Opportunities
- Global EV market projected to grow to $620.33B by 2030
- Expansion into emerging markets
- Energy storage growth potential
- Potential revenue from autonomous driving (robotaxis)
- Humanoid robot (Optimus) development
- Lower-cost vehicle models to expand market reach
Threats
- Increasing competition (BYD, traditional automakers)
- U.S. EV market share declined to 44% in Q4 2024
- Regulatory changes and tariff impacts
- Supply chain disruptions
- Potential economic downturn affecting demand
- Technical challenges in achieving Full Self-Driving
Conservative Investor
Recommendation
Hold / Underweight
Rationale
Tesla's high valuation, declining margins, and increasing competition make it a risky proposition for conservative investors. The company's focus on growth over immediate profitability, along with the significant influence of Elon Musk's actions on stock performance, adds volatility.
Strategy
- Limit exposure to 5% of portfolio
- Consider writing covered calls if already holding
- Monitor financial stability and free cash flow
- Watch for significant price corrections for potential entry
Growth Investor
Recommendation
Buy on Dips
Rationale
Tesla's leadership in EVs, energy storage growth, and potential in autonomous driving and robotics present compelling long-term growth opportunities. The recent stock decline provides a better entry point, though volatility is likely to persist.
Strategy
- Accumulate shares during market weakness
- Allocate 10-15% of portfolio maximum
- Focus on key catalysts (robotaxi progress, energy business growth)
- Monitor competitive landscape and regulatory developments
Value Investor
Recommendation
Avoid / Wait for Better Entry
Rationale
Most valuation metrics suggest Tesla is overvalued at current prices. The high P/E ratio, EV/EBITDA, and DCF analysis indicate limited margin of safety. Value investors should wait for a significant correction that brings the price closer to estimated intrinsic value.
Strategy
- Wait for ~30% correction from current levels
- Monitor improvement in profit margins and cash flows
- Assess success of new products and technologies
- Conduct thorough DCF analysis with conservative assumptions
Conclusion and Key Investment Considerations
Tesla remains a polarizing investment with both significant upside potential and considerable risks. The company's position at the intersection of automotive, energy, and technology gives it unique growth opportunities that justify a premium valuation. However, current market prices appear to factor in successful execution across multiple ambitious initiatives.
Key Investment Considerations:
- Market Timing: Tesla stock has shown high volatility. The recent decline may represent a better entry point than seen in recent years, but further weakness is possible as the company navigates near-term challenges.
- Position Sizing: Given Tesla's volatility and premium valuation, appropriate position sizing is crucial. Even growth-oriented investors should consider limiting Tesla to no more than 15% of their portfolio.
- Long-Term Perspective: Tesla's value proposition is best viewed through a long-term lens (5+ years). Short-term fluctuations are likely to continue but shouldn't override the assessment of fundamental business strength.
- Catalyst Timeline: Key upcoming catalysts include Robotaxi Day, Q2 2025 financial results, and progress on the next-generation low-cost platform. These events may provide opportunities to reassess the investment thesis.
In summary, while Tesla faces significant near-term headwinds including increased competition, margin pressure, and political controversies, its long-term growth potential remains substantial. Investors should align their Tesla investment strategy with their risk tolerance, time horizon, and overall portfolio objectives.