TSLA Stock Key Metrics
Tesla’s (NASDAQ.TSLA), rise has been nothing less than spectacular. It is difficult to believe that in 2012, Tesla’s revenues were just $1 billion.
Revenues have increased dramatically, with 2021 seeing a 71% increase in sales over 2020. The Q1 2022 quarter saw a record 81% increase in sales year-overyear.
The company’s margins are growing as it scales. This is a wonderful sign that profits are on the horizon. Tesla is not losing profits in order to grow – at this point, it doesn’t need to.
The company is also expanding vehicle production and delivery.
The company is concerned about supply chain problems, particularly at the Shanghai plant. China lockdowns are another problem. These issues are well documented on Seeking Alpha, as well as elsewhere.
Although the news looks positive, there are many issues that can be considered. The stock is in a slump and investors should consider several issues before investing.
Tesla stock will be affected by Twitter and other distractions
The story of Elon Musk’s bid for Twitter to be privatized (TWTR), has been huge. I have written more about this recently. The deal has been reduced to a seemingly daily titt-fortat. The fact that businesspeople feel the need constantly to make public the deal’s inner workings while it is not harmonious with the general Twitter dynamic is unsettling. It’s mildly entertaining. It’s tiresome. It’s not good news for Tesla stock.
It could be even more complex. Many are asking whether Musk’s distracted eye could be affecting Tesla’s leadership. A laser-focused Musk would be an ideal time to take Tesla to the next stage. There is always competition.
Musk is clearly aware of these concerns, as he recently tweeted “Tesla Is on my Mind 24/7.” It is alarming that Musk has to say this. Even if true, it can be dangerous for a leader to appear disengaged. One does not need to wonder if Tim Cook or Satya Nandella, the CEOs at Apple (AAPL), Microsoft (MSFT), truly are engaged.
There are many other rumblings. Tesla was removed as an ESG Index member of the S&P 500. This isn’t an important thing. If left to its own devices, the news would not register with even a fraction of investors. Musk reacted to the nonstory immediately by tweeting!
The confidence of a billionaire investor and Tesla’s largest shareholder calling for an “immediate announcement” of a stock-buyback program is not exuded by the caller.
The news finally broke Friday about a flight attendant accused of being paid to settle sexual misconduct allegations. Musk quickly responded in a provocative Tweet to defend himself. As the facts are not in dispute, I won’t go into detail. However, it’s another distraction.
Although these factors may have little impact on Tesla’s performance, they seem to add up. However, Tesla seems to have a lot more drama and uncertainty than it does – which is something the stock market loathes. Sometimes, in sports, it is said that “there is too many noises surrounding this team.” The team may be talented, but the distractions from the field cause underperformance and distraction.
Will rising gas prices lead to inflation?
Wait. These are not the same thing. Rising gas prices greatly contribute to rising costs for consumers. Although high gas prices might encourage consumers to buy electric cars, rising costs economy-wide could affect their ability to purchase new cars. It’s a toss-up between higher electric demand due high gas prices, and decreased consumer spending due to inflation. This chart shows that inflation is much more prevalent.
Many people will keep their vehicles for longer than they need. These vehicles might have extremely low-interest rates or be completely paid off. As you can see, consumer confidence, which is an excellent indicator of consumer spending has declined.
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Can Tesla’s competitive advantage be lost to competition?
The auto industry has been behind electric vehicles for many years. Tesla has made a name for itself in a sector which has remained loyal to its legacy products over the years, while focusing token investment on electric vehicle R&D.
Tesla is now facing increased competition from fully electric cars from many manufacturers. Ford (F), which is investing $22B over the next few decades to electrify a large portion of its fleet, has announced that it will spend $22B. Bloomberg reports that Mercedes-Benz, Volkswagen (OTCPK;VWAGY), Ford and Mercedes-Benz have set goals to electrify at most 40% of their U.S. sales by the end if the decade.
General Motors (GM), aspires to have an entirely electric fleet by 2035. There are many more. It is now a distant memory that Tesla was the only all electric company in town.
Additionally, electric vehicles and trucks will see a huge increase in sales, which will create a bigger market. Tesla will not be defeated by the competition. Not even close. To continue its amazing performance, it will need to be focused and determined.
Tesla’s shareholder meeting will be held in August. There, the company plans on allowing another stock splitting. The stock price shot up the last time Tesla announced a stock split. However, it came back to Earth within days.