Is Tesla stock a buy? Should you invest in Tesla stock in 2017. Tesla stock is popular among many investors, but before you invest your hard earned money in Tesla stock there are a few things you should consider. In this video, I will discuss the pros in support of investing in Tesla stock as well as the cons that might lead you to avoid Tesla stock. Is Tesla Stock a Buy | Pros of Tesla Stock 1. Tesla is innovative. Tesla has developed cutting edge battery technology, electric powertrains and vehicle software technology. Tesla also has a unique business model that involves online purchasing of vehicles as well as company owned showrooms. The business model for the sale of Tesla vehicles puts customer service and quality control at the front. 2. Tesla is part of a major trend shift. Tesla is currently caught up in what is really two major trend shifts. The first is the development of a practical electric vehicle for the everyday person. The second is the development of driverless cars. Mobileye, a vision based sensor company, believes that the autonomous driving market could hit $15 Billion within a few years. Tesla has been invested in emerging auto technologies since 2003 and the Tesla autopilot hardware has logged over 1.3 billion miles. Tesla currently has the advantage of data (1.3 billion miles driven) but the disadvantage of competing with google in this trend shift. 3. Tesla has the āMuskā factor. Elon Musk, the CEO of Tesla, has a track record of success. He helped launch Zip2, PayPal, Solar City and SpaceX. Elon Musk has made investors billions of dollars in the past and many people are invested in Tesla solely for that reason. Is Tesla Stock a Buy | Cons of Tesla Stock 1. The Solar City deal sucks for Tesla. Tesla acquired Solar City back in November 2016 in a deal that was worth about $2 Billion. Solar City is, unfortunately, a huge money loser. In 2016, Solar City reported close to $2 Billion in negative operating cash flow. Due to the nature of the business, Solar City is expensive to run between marketing and capital costs. Solar is also an extremely competitive market, and the outlook under the Trump administration for alternative energy is dismal. On top of this, Morgan Stanley reported that they see no additional value for shareholders from the deal with Solar City. 2. Tesla stock is extremely expensive. Tesla stock currently trades at close to $300 a share. Tesla is not a profitable company. Right now, the value in Tesla is all intellectual property. Is that worth the sky high valuation? That is up to the investor to decide. Short interest on Tesla stock is 31,068,721 shares, or 23.2% and while that isnāt sky high the short interest on Tesla is worth mentioning. The current price to sales valuation of Tesla is a multiple of 5.7, where the industry average is 0.5. Tesla stock is at a premium. MY OPINION ON TESLA STOCK: Due to the valuation of the stock, the Solar City acquisition, competing with Google in this trend shift and the potential snags with scaling their unique business model I will not be investing in Tesla stock. I see it as a speculative investment right now based on the intellectual property of Tesla. Website http://www.ryanoscribner.com Follow me on Twitter! https://twitter.com/RyanOScribner Facebook! https://www.facebook.com/ryanoscribner/ Personal Fitness Coaching http://www.ryanoscribner.com/shop Related Videos: Is Tesla Stock a buy? | Tesla Stock! | Tesla! https://www.youtube.com/watch?v=jetqsW6HZGo Buy or Sell Tesla Stock? | Stock Analysis: Tesla https://www.youtube.com/watch?v=aHdmnbmigCQ Related Articles: Tesla Stock Nears $300: What Investors Need to Know https://www.fool.com/investing/2017/04/03/tesla-stock-nears-300-what-investors-need-to-know.aspx Should I Buy Tesla Motors Inc (TSLA) Stock? 3 Pros, 3 Cons http://investorplace.com/2016/12/should-i-buy-tesla-motors-inc-tsla-stock-3-pros-3-cons/#.WOYxEvkrLRY The Simple Reason I Won't Buy Tesla Motors Stock https://www.fool.com/investing/2017/01/04/the-simple-reason-i-wont-buy-tesla-motors-stock.aspx Tesla Stock Quote https://finance.yahoo.com/quote/TSLA?p=TSLA If this video brought value to you, please leave a like! If you are looking to find out more about anything I discussed, drop me a comment or contact me on Twitter. Subscribe to be updated on my journey through life!
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I think that there's a lot of hype about this stock which makes it scary. You can see the hype when Tesla issues new shares and the price just goes up, instead of falling down like "a falling knife" as it would happen in most stocks. The new issued shares just keep getting bought by Tesla fans and people profiting from the hype.
If for any reason this hype ends, the results could be bad for longs.
On the other hand, there's something we might be missing. Tesla is not just a car company. It's an energy company. I bet in 50 years the normal thing will be to have solar roofs and batteries that can power our homes. Tesla is changing the paradigm of our lifes and this means they are going to make a shit load of money.
At the same time, they started too soon (somebody had to start it, or the change to clean energy would never happen) and when demand for self production and storage of energy increases, other big energy companies will just jump in and compete to death with tesla.
I see the same happening with cars. Tesla made the first electric cars that were powerful, had great range, were beautiful and cool in general. Now every car maker has seen there's demand for this kind of cars and wants to have a cool electric car in the market just like tesla did. Thankfully for Tesla, they are ahead and the more affordable Model 3 will hit the market soon. That segment has less competition for electric cars and could make the company finally profitable.
We should not forget that the company is into Artificial Intelligence, which is definitely where the future is going.
CONCLUSION: I think Tesla stocks will keep going up as long as Elon Musk can keep the company going forward and innovating. If he steps out and let's others manage the company, a lot of uncertainty will come to a stock that might have just been overhyped.