Simply put, so far it was a wild ride 2025 Tesla (NASDAQ: TSLA). At the beginning of the year, the price of Tesla was over USD 400. Since then, it has reached USD 428 – and USD 222.
But although miniature -term sites are dizzying, I am a long -term investor, which is why I prefer to go back and look at a larger picture. Tesla has increased over the past year, and shares are 90% higher than just 12 months ago.
In five years, the profit was a phenomenal 530%.
I have been admiring business for a long time. Earlier it was on the ropes and fought. He established the leading activity of an electric vehicle (EV) at a break, develops its activities in the field of energy storage in the amount of nodes and the benefits of a powerful brand, vertically integrated business model, which reduces marketing costs and many reserved technologies.
Could there be a moment now to add it to my portfolio? Or maybe he can still have a long way to fall?
Old but vital fears about the valuation
I think that the price of the action may still have a long way to fall and will not invest for now.
Almost all life as a listed company, vocals and a gigantic number of investors mock what they considered as an unbalanced price for Tesla. However, as I pointed out above, with time it moved up, seemingly indefinite to many time-honored valuation indicators, such as the price of shares for a profit.
Nevertheless, this price ratio to profit (p/e) is now 189. For me it does not look simply pricey, it looks a bit red. It is much above what I would like to pay for Tesla shares.
Not only that, but I think it can get worse. Last year, the amount of sales of Tesla vehicles fell slightly. In the first quarter of 2025, a much sharper year on year fell, as well as the fall of earnings.
With the EV market now very competitive, thanks to such as such HunterAnd although Tesla loses their market share, I think that earnings may fall this year and maybe outside of it. So the valuation indicator I mentioned above may not even fully capture how pricey the prospective attitude of the P/E.
Why Tesla can still be a long -term opportunity
Despite this, many investors still keep faith. Tesla’s car activities have long been a fight against bad opportunities, but the management turned out to be time and time that was able to maneuver the car manufacturer forward at speed.
The novel streams of income that will appear soon include gigantic -scale trucks. Other potential product lines include automated taxis and robotics. Both can be huge. Tesla has a convincing combination of know-how of hardware production, software and user data to support him in determining a powerful competitive position.
In addition, energy storage activities could develop very quickly, potentially making a significant contribution to the upper and lower line of the company in the coming years.
If all this goes well, today’s price of Tesla’s action can still look like an opportunity in a rearview mirror.
But it’s okay a complex task. It will turn out if the company can do it. For now, I will not buy Tesla shares.
