Should you buy Tesla stock? (July 2024)
Published first at https://www.3minutebreakdowns.com
Tesla stock analysis. Ticker: $TSLA
Tesla reported earnings last week and the stock dropped about 10% taking the company’s market value to 765 billion dollars. With 31 billion of cash and investments and just under 8 billion of debt the enterprise value is 742 billion.
Revenue over the last 12 months comes to 95 billion with 12.4 billion of net income and 1.7 billion of free cash flow. So Tesla stock is now valued at 62 times earnings and over 400 times free cash flow.
Fundamentally, Tesla stock looks like an easy sell. Not only does the stock trade at a nosebleed valuation but results over the last 18 months have been pretty weak. Total automotive revenues are down 10% this year and high capital expenditures have crushed free cash flow. Adjusted ebitda is down 21% year over year and vehicle deliveries have also slowed. Operating margins sit around 8% which is lower than Toyota Motors.
At this point, even Tesla bulls agree that the car business is simply not enough to support the current valuation. The company needs other more profitable revenue sources.
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