Is Tesla Stock A Good Buy Right Now?


Wall Street analysts are confused on the current state of Tesla stock. The electric car manufacturer has a shaky stock forecast ahead of them and if Tesla Model 3 production is not efficient, share holders may become weary. Today we are taking a look at the Tesla Stock Price History from when their IPO kicked off back in 2010.

Tesla Stock Price Prediction

Stock market analysts compare the variation of the share price over a set amount of time. This is then compared to the average share price that Tesla exhibits and then future share prices can be predicted around the previous prices.

Tesla is actually in the top 3 “most confusing stocks” on Wall Street today. This is because their stock price fluctuates so much.

Tesla Stock Price History

In the last few weeks it has been a rollercoaster ride for Tesla shareholders due to the announcement of the Model 3, but also due to autonomous crashes. The company saw shares plummet after a huge Model S recall. Although, arguably the biggest worry to shareholders is the autopilot crashes.

Last month, Tesla issued a factory recall of 123,000 Model S vehicles (optional) due to an issue with the power steering component. April 2018 also saw a fatal crash occur after the autopilot was activated. Wether the crash was 100% due to the autopilot system has not yet been reported.

However, things may be looking up for Elon Musk and Tesla since they have crossed the 2,000 car a month production rate for the Model 3 earlier last month. This increase in car production may see more affordable Tesla’s, which in turn should increase their sales. Elon issued an email to shareholders saying that Tesla intent to produce 2,500 Model 3 cars weekly by the end of quarter 1. This shows a bright horizon after years of having a rocky Tesla Stock Price History.

To fully understand what Tesla is going through in terms of stock market performance, lets take it all the way back to 2010..

Tesla 2010 Stock:

Lets take it back to the start of Tesla stock price history, Tesla IPO was on June 29 2010, which saw shares going for $17USD. Investors couldn’t get enough of the “new stock” and send the price into overdrive. Stock prices reached highs of $30.42. This was a great day for lots of investors because in only 8 years (2018) this stock is now worth 20x more than what they originally bought it for.

Although only weeks after the company went public, the stock price plummeted to 5% below the IPO price. The fluctuation in TSLA 2010 share price was attributed to Elon Musk’s lack of financial power.

The Model S was only a prototype and one that many people doubted would be on the market.

Tesla 2011 Stock:

In 2011 a Morgan Stanely analyst (Adam Jonas) said this “Tesla shareholders are banking on the near-dated success of the Model S launch and a longer-dated mass electric vehicle adoption. The former has appreciated handsomely while the latter is declining.”.

From that statement along its clear to see that it was still troubling times for Tesla as their entire company mission was being put under constant scrutiny from Wall Street. Morgan Stanley also argued that electric vehicle sales will be less than 4.5 percent of total automotive sales by 2025. In 2017 electric car sales only made up for 0.9% of all car sales in the US. So maybe Morgan Stanely predictions were quite close after all.

Tesla 2012 Stock:

In 2012, Tesla had four consecutive quarters of losses which was not looking good in investors eyes. In 2012, Tesla had only a few options at generating more money, none were good..

Tesla did have access to public money, they also had the option to sell more stock to investors and use the money to spend on future operations. Tesla did the later.

October of 2012 saw Tesla raise around $195Million after a follow-on investment which was executed by Goldman Sachs.

The Stock’s Behaviour

If you have a look at the stock prices of Tesla, you will find the graph is quite peculiar. It rises and falls as if it is a free bird and goes fluctuating so much that people are always keeping a tab on it. Morgan Stanley had also published a report “Tesla 2018: $400, then $200?” The report talks about the volatile nature of the stock of Tesla in the coming year ahead. And this kind of behaviour of Tesla’s stock is not new. This is how the stock has been behaving all the time if one takes a look at the Tesla Stock Price History.

Morgan Stanley’s Report

The report published by Adam Jonas at Morgan Stanley emphasises the volatility in the predictions of the stock prices. The number of Model 3 cars that will be produced this very quarter has been slashed from 10,000 down to 1,000. It is improbable to find the sales forecasts being reduced by 90%, and especially when we are halfway through the quarter already. The number of Model 3 cars that Tesla will produce is still quite ambiguous and keeps people anxious all the time.

The report also shows that the high-end car making company will lose $1 billion, instead of the forecasted $688 million. This is a further bad news for people who have invested in the reputed company. The company is turning into losses from being a profitable company. Predictions for the next few years remains grim. The company is now getting famous, or we must say infamous, for spreading optimism and resulting in increasing pessimism. The gap between the EBITDA and the free cash flow figures shows the disparity that exists in the forecasts that the company has done.

The problem.

The issue lies in what Tesla is doing right now. As a futuristic company, it is investing its time, resources and efforts into building self-driving cars, electric cars and many other such machines. At the same time, it is also doing the old stuffs, like building conventional cars. This is leading to setting of targets that are not being met because of the confusion about the direction in which the company is going forward. What is keeping the company’s stock prices still high sometimes is the subtlety of the promise that it makes of making futuristic changes in what it makes. The transformation it is bringing in the society, technology and also in the consequent profitability is what is driving the antidote to short-term losses. This is why the market cap of Tesla is still at $50 billion.

Tesla Stock Price Target

If we have a look at the forecasts made by Morgan Stanley, we can see that in spite of all the concerns that the report has communicated, it has not changed the price target of $379 per share based on the two models of discounted cash flows. The forecasts for the years beyond 2020 have also not changed much. If we look at the forecasts closely, we will find that the valuation was increased to $379 from $317 in October, by adding $10.4 billion in the entire process.

The exit multiple was tweaked higher on the vehicle business of Tesla. Moreover, the discount rate on the business, Tesla Mobility– autonomous ride sharing venture, was tweaked down. This implies the terminal was increased on Tesla’s core business and this was made to trickle down to each dollar that would be coming from the business. What now needs to be seen is how close can Tesla produce cars with respect to its original guidance.

Tesla Stock Price Prediction

The stock prices may increase if the improvements in the supply line are made. However, the increasing threats to its growing business can again bring the stock prices down, much to the despair of the investors. So, if you are an investor, what should you do next? Should you avoid Tesla’s stocks given the kind of volatility that exists? Or should you just simply jump into the sea of uncertainties and take a chance with the investments? People may trust the $379 projection even if it is totally dependent on the 10-year forecasts. Just look at the Tesla Stock Price History and you will see it’s not so black and white.

But beware! Tesla can invest a lot of money into its new endeavours and end up burning a lot of it. So, investors must tread with caution on how they are going to invest in the company. Right now, the investor confidence is on a high and will remain so for some time too. You may fear that the stocks may dip sharply in the coming quarters, but then you must also remember that the stocks of the same company had once begun from $20 in 2010 and have reached above $300 by now.

Tesla Stock Price Chart

Tesla Stock Price History
Tesla Stock Price History

Therefore, whatever decision you take for your investment, weigh your options. The company can do well in the future, at least that is what the investor confidence displays. But markets are always volatile and it will require you to be bold enough to throw challenge to the winds while investing in Tesla’s stocks. The past shows that the prices have fluctuated over time but have soared higher in the last 8 years. If you are the kind of challenge-loving person, then go ahead and try your hand at the investments. In case the stock prices rise even further, you may see a windfall in your gains.

If you are into stocks and trading, you must be looking forward to a company that can give you a feel of a roller-coaster, then you must look for the stocks of Tesla. The kind of excitement that Tesla’s stocks can give you is unparalleled. It is quite hard to predict the future of the stocks of this company as it is quite volatile. The rise in the stock prices of the company and the volatility in the predicted prices makes it one of the most exciting stocks in the market It will keep you on your toes all the time and is one that stock traders love to work with. After looking at the Tesla Stock Price History it’s clear to see things are on the up for Elon end electric cars.