Tesla is firing on all cylinders. Look for this momentum to continue for the rest of the year.
What Happened to the Tesla Stock Price Today?
- Tesla (NASDAQ:TSLA) stock dropped slightly on Tuesday, April 27, after the electric vehicle maker reported fourth-quarter numbers, which topped revenue and profit expectations.
- Heading into the print, TSLA stock had rallied about 25% over the prior month.
Why It Happened
- Don’t let the TSLA stock price reaction fool you. Tesla’s earnings were really good.
- The automotive business is on fire. Deliveries rose 109%. Revenues rose 75%. Gross margins expanded 95 basis points to a very healthy 26.5%. Q1 order rate was the strongest in history. Production ramp in California, Texas, China, and Germany all remain on track. Management reiterated their 50% delivery CAGR over the next few years.
- The solar and energy storage businesses are bouncing back nicely, as the economy recovers. Solar deployments rose 163% back to record highs. Storage deployments rose 71%, powered by huge demand for the Powerwall. Revenues in this segment rose 69%. Gross margins remain under pressure, but that’s to be expected this early in the business’ ramp.
- Total gross margins expanded 71 basis points to 21.3%.
- Operating margins expanded 99 basis points to 5.7%.
- Everything is trending in the right direction for this company right now.
Does It Matter?
- You’re getting a little “buy the rumor, sell the news” action in TSLA stock here.
- Investors bid up TSLA stock into this print. Shares were up 25% over the prior month. Now, they’re doing some profit-taking.
- Don’t let these near-term trading dynamics scare you.
- The outlook for Tesla in 2021 is very good.
- A rebounding global economy coupled with strong “green” incentives almost everywhere will spark big demand for Tesla’s cars, solar panels, and energy storage solutions over the next few quarters.
- Competition still remains largely muted, as most players that could compete with Tesla won’t launch their competitive offerings until late 2021 or 2022.
- Tesla’s growth trajectory should remain very robust for the balance of the year. Against that favorable backdrop, TSLA stock should outperform.
TSLA Stock Price Forecast
- We would be lying if we told you that we aren’t worried about how Tesla’s valuation will hold up over the next few years, as more and more competition in self-driving, EVs, solar, and energy storage arrives.
- But, in 2021, TSLA stock is set for a big year.
- The momentum is there. The fundamental backdrop is great. And the sentiment remains overwhelmingly bullish.
- Look for TSLA stock to make a run to $1,000 this year.
When all is said and done, Tesla stock is still one of the best growth stocks buy and hold for the long haul.
But it’s not the best growth stock to buy today.
Instead, the best growth stock to buy today is a company that reminds me of a young Amazon (NASDAQ:AMZN). Indeed, I think buying this stock today could be like buying AMZN stock back in 1997 — before it soared thousands of percent.
Which stock am I talking about?
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
By uncovering early investments in hypergrowth industries, Luke Lango puts you on the ground-floor of world-changing megatrends. It’s how his Daily 10X Report has averaged up to a ridiculous 100% return across all recommendations since launching last May. Click here to see how he does it.
Article by Meet Luke Lango, InvestorPlace
Meet Luke Lango
By uncovering early investments in hypergrowth industries, Luke Lango puts you on the ground-floor of world-changing megatrends.