Tesla Inc. (NASDAQ: TSLA), formerly known as Tesla Motors, Inc., is an American corporation that specializes in the design and manufacture of electric automobiles as well as other renewable energy technologies. The company’s product line has lately expanded to include solar panels and solar roof tiles.
Tesla has been expanding its business abroad in order to meet the growing demand for electric vehicles. This is in keeping with the agendas of most governments and non-governmental groups to promote sustainable energy that does not hasten the existing rate of climate change. Tesla has been at the vanguard of efforts to reverse climate change and make the world a better place.
Since its inception, the company has not had a profitable year, however it has had multiple lucrative quarters. The latest profitable quarters are those that ended in September 2018, December of the same year, September of this year, September of this year, and December of this year.
By the end of 2019, the company has recorded a production output of over 367,500 automobiles. The company’s operational income was -$0.07 billion in the same year, while its net income was -$0.86 billion. Its total assets were estimated to be worth $34.3 billion (February 2020).
Should I Buy Tesla Stock?
Global electric vehicle (EV) sales were 2.6 million units in the first half of 2022. It doesn’t appear to be much. However, compared to the same period last year, unit growth was up 160 percent. That’s more than six times the rate of the whole automobile market.
In 2016, electric vehicles accounted for fewer than 1% of total new car sales worldwide. By last year, that percentage had risen to 4.6 percent. The rate of adoption is increasing. According to Wood Mackenzie, an energy research group, that number is presently at 7%. Many experts predict that by 2035, electric vehicles will account for 25% of all vehicle sales.
Because revenue has increased by 256 percent since 2017, the percentage spent on research and development, sales, and overhead has been lowered in half. Simply said, the company has transformed from a near-bankruptcy to a self-sustaining cash flow machine.
There could be a lot more to come in the future. While the company should be commended for its comeback, many investors are focused on new markets that the company may disrupt.
Tesla now has a market capitalization of $777 billion, thanks to bullish analysis from Cathie Wood’s ARK Invest and the stock’s inclusion in many of ARK’s high-profile exchange-traded funds.
While the company should be praised for the turnaround, many shareholders have their eyes fixed on new markets the company could disrupt. Led by sanguine analysis from Cathie Wood’s ARK Invest, and the stock’s inclusion in several of ARK’s high-profile exchange-traded funds, Tesla now sports a market capitalization of $777 billion.
How To Buy Tesla Stock
If you want to buy Tesla stock, there are certain procedures you must follow to reach your goals. They include:
#1. Create an account with a brokerage firm.
You’ll need to open a brokerage account to purchase and sell securities like stocks, mutual funds, and exchange-traded funds (ETFs). However, a brokerage is more than just a way to ride TSLA to the moon. It also includes all of the information and instruction you’ll need to be a successful investor, as well as many sorts of investment accounts tailored to specific objectives.
Tax-advantaged accounts are probably better for long-term investing, such as for retirement or a child’s college fund. Individual retirement accounts (IRAs) and 529s, for example, receive a unique tax credit from Uncle Sam, which can help your money grow even faster. However, you can only reach the monastery if you have a monastery.
However, you can only access the money in them without penalty at specific times (like as retirement) or for specific causes (such as your child’s educational expenses).
A taxable brokerage account is best if you want greater flexibility with your investment account—for example, if you want to save for your own Telsa in the next several years. These allow you to invest for any reason or for any length of time, albeit you will have to pay taxes each time you sell an investment or earn dividend income.
Because not all brokerages are made equal, you should examine the fees, available investments, and services offered by at least a handful to figure out which one is best for you.
Purchasing Tesla stock is simple once you’ve chosen the right brokerage for you: Simply enter its ticker symbol—TSLA—along with the number of shares you want to purchase. You can also specify a monetary amount and let your broker figure out how many shares (or sections of shares) you can purchase.
Purchasing TSLA, however, does not end here. To make sure you’re investing your money as wisely as possible, follow the next four steps.
#2. Decide how much money you want to put into it.
You probably won’t be able to give Elon Musk your entire paycheck. To figure out how much you can afford to invest in TSLA, you’ll need to ask yourself a few questions.What is your financial plan? After you’ve paid all of your monthly bills, you can save and invest whatever money you have left.
If you don’t already have one, you should put at least some of that money into an emergency fund, as well as retirement savings. The rest, however, can be directed toward other assets, such as Tesla.
What is the current price of TSLA? Stock prices fluctuate all the time, but Tesla’s stock has been trading at more than $400 a share for the past year. As a result, you might not be able to purchase a whole share of TSLA quite now. Fortunately, several brokerages, such as Charles Schwab, Robinhood, Fidelity, and Stash, allow you to acquire fractional shares of stocks.
What is your approach to investing? The majority of people invest in one of two ways: enormous lump sums all at once or little amounts over time. This latter strategy, known as dollar-cost averaging, can help you reduce your risk and spend less per share on average over time.
What about the rest of your assets? If you’re already an investor, you should consider how Tesla fits into your portfolio. According to Chip Workman, a certified financial planner (CFP) with The Asset Advisory Group, “any particular stock transaction should play a relatively minimal impact in the average investor’s portfolio.” A solid rule of thumb is that no single stock should account for more than 5% of a portfolio’s value.
#3. Examine Tesla’s Past Performance and Future Prospects
It’s a good idea to do some study into Tesla’s financials, performance, and future outlook before buying Tesla stock—or any stock, for that matter. The annual reports (Form 10-K) and quarterly reports of a firm are the best places to start (Form 10-Q). Companies that are publicly traded, such as Tesla, are obligated to provide specific financial information in these reports.
These can be found on Tesla’s investor relations website or in the Securities and Exchange Commission’s (SEC) database.You could also seek advice from specialists. Brokerage firms routinely issue commentary on key stocks and industries, while third-party evaluators such as Morningstar give in-depth research.
You’ll be able to select how much of your money you want to put into Tesla when you combine financial facts with expert knowledge.
#4 Make a decision on the type of order you want to place and then submit it.
You can purchase your first Tesla shares once you’ve decided how much you wish to invest. Log into your brokerage account and type in Tesla’s ticker symbol (TSLA), as well as the number of shares or dollar amount you want to invest.
You can buy shares at their current price with a basic market order, or you can use a more sophisticated order type like limit or stop to acquire TSLA only if its price falls below a specified level.Because Tesla is traded on the Nasdaq exchange, you can buy it from 9:30 a.m. to 4:00 p.m. ET Monday through Friday.
You can continue to place orders for a few hours before or after the market opens if your brokerage offers pre-market and after-market trading. Any orders submitted outside of the trading hours will be filled as soon as the exchange reopens.
#5. Assess the Return on Your Investment
Whether you invest in Tesla or other securities, it’s a good idea to monitor their performance on a regular basis. Starting with annualized percent return is arguably the most straightforward option.
This allows you to compare TSLA’s performance over the course of a year to that of other companies or investments. You can also check Tesla’s financial data to see if it’s still going in the right path.
You may also wish to compare TSLA’s performance to industry benchmarks, such as the S&P 500 and Nasdaq Composite Index, in addition to other stocks. This will show you how Tesla is performing in comparison to the rest of the market.
Frequently Asked Questions
While Tesla is currently not profitable, analysts believe that will change very soon.
Some investors have expressed concern about Tesla’s high valuation measures. Its price to earnings (PE) ratio is 396.9, according to the most recent quarterly data. In comparison, Tesla’s automobile manufacturing rivals Ford and General Motors have PE ratios of 15 and 5, respectively, indicating that Tesla stock may be overvalued.
Consider at least paring your position if you’re panicking. Investment experts have typically advised holding no more than 15 percent of your portfolio in risky or speculative positions overall, and no more than 5 percent in any one stock.
Tesla isn’t inflated by Wall Street’s reckless complacency or excitement. Only seven of the twenty-five analysts who cover Tesla have outstanding “buy” ratings.
The most recent drop in Tesla stock isn’t the worst since the company went public in 2010. It isn’t even close to being in the top three. It has lost more than a third of its value three distinct times. In the last eight years, Tesla stock has experienced nine big declines of 20% or more, as well as numerous smaller but nevertheless painful drops.
As you may have noticed, purchasing Tesla (TSLA) stocks is now as simple as purchasing commodities in a physical store. Investors will no longer have to shout on the floor of the stock markets to buy their stocks, thanks to advances in technology.
The bid and ask buttons make all the noise while the brokerage company finds the best offer based on your request. Investing in Tesla will necessitate a lot of discrete actions, since the stocks have become extremely volatile as a result of the high level of speculation among investors.