Tesla Stock Analysis – Where Is $TSLA Headed?

  • October 8, 2020

Have you looked at Tesla stock analysis lately? You know the name, you know the brand, and you know the stock that has captivated investors for most of this year.

Tesla (NASDAQ:TSLA) is without a doubt, the most intriguing company in the world right now. Whether you are a Tesla bear or a Tesla bull, it's impossible to deny the impact that it has had on the investing world.

The world was changed forever the second that Tesla’s first zero emissions vehicle hit the roads. It's a necessary evolution; for the sake of our environment, our fossil fuel reserves, and the overall shift towards digitizing and autonomizing our transportation methods.

But I’m not here to sell you on Tesla’s cars. This article is meant to provide a full Tesla stock analysis of where it's now; and where it could be in the future.

Tesla Stock Analysis

Trading on the go in a Tesla? Easy, just turn on auto-pilot and trade away (kidding don't do this)

Cars are just one part of Tesla’s long-term plans. And are quite literally just the vessel that is being used to carry out Elon Musk’s Master Plan.

Tesla Stock Analysis and Where Is $TSLA Headed?

  • Analysis: So let’s start with Tesla stock analysis. The stock market is future-looking. That's the first thing we need to know. The price of a stock is generally a market value as to how the company is performing; but also how it will perform moving forward. Today, the stock is trading at a split-adjusted price of $415.09 per share. Like with most days, Tesla’s stock dropped violently today by 7.38%. Or a loss of just over $33 per share. The stuck swung on no particular news, except that Tesla beat Wall Street estimates on the number of vehicles it delivered in the quarter. 
  • Volatility: Does it sound volatile? It is. Investors have come to know that Tesla shares fluctuate from day to day causing for a tumultuous ride. But for a company with a near $400 billion market cap, shares are still up an astounding 868% over the previous 52-weeks. Something we just don't see with any other company. But of course, Tesla isn't just any other company and a Tesla stock analysis, is not just any other analysis.
Tesla Stock Analysis

$TSLA daily chart has been consolidating for a big move. If the triangle breaks, there is a potential to test the lower Fibonacci level and the angular support (trend). Check out the chart via TrendSpider.

1. Tesla Cars

We all know the sleek cars that are quickly populating the roads these days, with several models now rolling out on a continuous basis. The Model 3 is the entry-level vehicle.

It continues to be the company's best seller. Through the first half of 2020, the Tesla Model 3 outsold the next five best-selling electric vehicles combined around the world.

In America, the Model 3 outsold any other car in its class, including non-electric cars like the BMW 3-Series and the Mercedes Benz C Class. The Model S has best in-class ratings.

It offers some of the fastest 0-60 MPH acceleration ever recorded. This is the flagship model for Tesla and it shows. Drivers can receive software updates on the go; which help to improve user experience and on-board functionality. If this sounds like a computer on wheels, it basically is.

2. Tesla is Taking Over the Roads (Slowly)

The Model Y and the Model X provide the same level of luxury, performance, and zero-emissions for the crossover and SUV classes.

Along with this is includes the upcoming Cyber Truck. It's set to debut at some point in 2021 and offers the Tesla experience to an entirely new market of drivers.

Tesla is also getting into the long-haul delivery game with the Tesla Semi that's set to debut in the next couple of years.

Did you know it'll offer companies a savings of $200,000 in fuel costs for every 1 million miles the Tesla Semi drives. Are we sure Tesla isn’t a car company?

We need to learn how to stock market works so we can put Tesla stock analysis to use.

3. Tesla Stock Analysis of Autos, Technology and Energy

Sure, Tesla can be categorized as a car company. In the same way that Apple (NASDAQ:AAPL) is a phone company and Google (NASDAQ:GOOGL) is a web browsing company.

So what is Tesla then, if not a car company? If you look at the very heart of what Tesla is trying to do, you'll find that perhaps the most appropriate answer is that Tesla is an energy company.

What does Musk want more than anything? A fully sustainable ecosystem that thrives off of data analytics, and machine learning. 

Twenty years ago, plugging your car into your home to charge it and then driving it to work would have seemed like something out of a science fiction movie.

But for hundreds of thousands of people, this is now a daily routine. Musk wants to turn each of our homes into a source of energy.

He wants hour homes to have Tesla Power Walls that store energy and can be tapped when you need to use it. And roofs made of solar panels that can absorb solar energy.

Then store it in your home. All of which can be controlled by your Tesla mobile app; which can allocate and distribute energy around your home as is required. 

Tesla stock analysis can use MACD to help you confirm a trend. This'll be important if Musk ends up taking over the world with his ideas.

$TSLA Chart October TrendSpider

Hourly Trend of $TLSA vs the 50 Simple Moving Average (daily time frame moving average) - last time we tested this MA we bounced, will we bounce here?

Tesla Stock Analysis: So Much More Than a Car Company

If you think that's a bit of a leap from electric vehicles to electric homes, you should see what else Tesla is planning. Autonomous cars and artificial intelligence are at the forefront of Musk’s ultimate plans.

If we can create a network of cars that speak to each other on the roads, Musk believes that, when done correctly, this could be safer than cars driven by humans.

Musk once said, “the most important reason is that, when used correctly, it is already significantly safer than a person driving by themselves and it would therefore be morally reprehensible to delay release.”

But just how are these cars going to talk to each other? The same way any machines talk to each other: data. 

Data analytics and cloud computing are just two of the ways in which Tesla is hoping that all of the data being captured. Its vehicles can create a digital map of the roadways in a specific city or area.

If each Tesla car can contribute its data to help construct this map, theoretically Tesla can then blast this data out to the entire fleet of Tesla vehicles.

See where this is going? Tesla also wants to leverage all of this data they're capturing to start its own insurance company. They then would be able to provide Tesla drivers with a lower cost of insurance; based on the driver’s tendencies.

How will they be able to measure this? Data. Each Tesla will be able to provide data from its driver. Which could include things like how fast or how reckless the driver can be, or how cautious they drive at nighttime. Cars are just the vessel, and Tesla, is so much more than a car company.

1.Tesla Stock Analysis: Valuations

So back to the Tesla stock analysis. The valuations for this company are trading at stratospheric levels. Everyone knows this.

Tesla isn't even profitable yet. Yet the stock is trading at a trailing 12 months price/earnings ratio of 936, and a forward price/earnings ratio of 116. 

In comparison, the average price/earnings ratio of the S&P 500 is historically between 13 and 15. The market cap of the company is sky-high.

That makes it easily the most valuable automaker in the world. If you consider Tesla a tech company, it's worth more than Verizon, Netflix, Oracle, and Cisco.

If you consider Tesla an energy company, it dwarves the industry giants and is worth more than Exxon Mobile and Chevron combined. 

And yet, shares of Tesla are some of the most popular stocks and options traded on the investing app Robinhood. And in August, when the company underwent a 5 for 1 stock split, the stock popped over 50% in the month leading up to the split date. 

Currently, Tesla is on track to deliver its goal of 500,000 cars this year. However, the fourth quarter will need to be a good one as they still need over 180,000 to reach its goal.

Even Wall Street doesn't know what to do with Tesla; as 32 different analysts range from $19 to $800 per share over the next 12 months. The truth lies somewhere in the middle and fully depends on how you define Tesla as an investor. 

$TSLA Stock Analysis In Conclusion

If you only think it is a car company, then it's overvalued. If it's a renewable energy resource company that will shape the way the world powers itself moving forward, then no valuation may be able to monetize what Tesla truly means to our future. Tesla may be the most difficult stock to do an analysis of. But we know one thing is for sure: it's so much more than just cars.

Before you go, if you're looking to the future of space travel, consider a look at Blue Origin stock.

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