Is Tesla Stock Under $360 a Share an Obvious Buy in September?
The stock has fallen by more than 20% this year, but still maintains a market cap of around $1.4 trillion and a lofty valuation.
Tesla's stock is currently trading under $360 per share, well below its $500 per share 52-week high. Despite being below the average analyst price target, the question remains whether this makes Tesla an obvious buy. The financials of Tesla are mixed, presenting an interesting story. The company's record second quarter of EV deliveries and a 26% increase in total revenue to $28.2 billion seem promising at first glance.
However, when considering its profitability, the picture becomes more complex. Free cash flow turned negative due to soaring capital spending. Margins are under pressure as Tesla invests up to $25 billion this year in new Cybercabs, AI initiatives, and robotics.
While these investments may be somewhat speculative and carry execution risks, for investors with a long time horizon, the potential payoff could be enormous. The company's energy storage capabilities are of particular interest, as they become increasingly important in the current AI boom.
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