Over the past couple of years, Tesla stock prices have shown serious fluctuations. In a matter of days, they changed by 10-15% in one direction or the other. Experts from the financial portal Joseph Marc Blumenthal told whether it is worth investing in Tesla shares and what risks investors should take into account.
Issuer Information
Tesla is a high-tech manufacturer of electric cars. The company has occupied its own market niche and today competes with global concerns that produce traditional cars. In addition, the corporation is developing in the field of energy and produces solar panels.
In 2021, the company led the list of auto giants in terms of capitalization, stepping over $1 trillion. The production volume of the manufacturer's vehicles is constantly growing. According to the results of the fourth quarter of 2021, Tesla's profit increased by 2 times compared to the same period of the previous year.
Despite the pandemic and the economic situation, the company shows stable growth. Tesla shares, unlike many other US stocks, are gradually increasing in price. Although the February events of 2022 were reflected in sharp jumps in quotations.
Existing risks
If you plan to buy Tesla shares, you should consider the possible risks:
Strong competition in the auto industry . Giants such as GM, Volkswagen and others are investing in the development of electric vehicles. Given the prices for Tesla products, this may lead to a drop in demand for cars of this brand.
High share of uncertainty . The company's sales and profit figures are unstable. In a number of states, programs to provide tax compensation for the purchase of Tesla cars are ending.
The enterprise never paid dividends to shareholders . Therefore, its shares are not suitable for permanent passive income.
Elon Musk's acquisition of cryptocurrencies for the enterprise is intended to increase revenues. But this type of currency is characterized by the absence of regulators, and its rate is unpredictable. In the event of a sharp drop in prices for cryptocurrencies, losses cannot be avoided .
Most financial analysts recommend investing in company shares and do not advise getting rid of them. However, some experts consider Tesla shares to be overvalued. They are sure that their prices are not justified by profit and loss indicators. A number of investors, buying shares, are betting on the future technological breakthroughs of the manufacturer.
Investment prospects
Despite short-term drops in Tesla stock prices, investing in Tesla shares has the following advantages:
Developing industry . Interest in environmentally friendly transport is growing. More and more people are thinking about the environment, which makes the electric vehicle industry promising.
State support . The corporation receives state subsidies and tax preferences. The state is interested in the further development of the manufacturer.
Leading positions . So far, Tesla is leading the way in electric cars, and it’s not easy to catch up with it.
All this allows us to draw a conclusion about the great prospects for the electric vehicle market. And the probable income of the owners of securities of the Tesla company.
Conclusion: Tesla shares have a good momentum on the stock exchange. Despite this, quotes are subject to strong fluctuations. Therefore, before buying shares of a company, it is worth weighing all the pros and cons.