Tesla (NASDAQ: TSLA) appears to be successfully hitting key objectives to sustain its business health. Oppenheimer analysts have observed a quarter-over-quarter recovery in vehicle sales and a decrease in inventory, indicating positive momentum. But is now the right time to invest $1,000 in TSLA? Let’s explore.
Recent Performance and Key Drivers
Vehicle Sales Recovery
Tesla has seen a notable recovery in vehicle sales. This quarter-over-quarter improvement suggests that the company is managing its production and sales channels effectively, a positive indicator for investors.
Energy Storage Sales
Bullish investors highlight the strength of Tesla’s energy storage sales, which are expected to exceed $3 billion in the upcoming quarter. This segment is becoming increasingly important to Tesla’s overall revenue mix.
AI and Full Self-Driving (FSD) Technology
Tesla’s transition to AI and FSD technology as its core value and growth driver is another critical factor. The potential for a Model 3 update and the introduction of Model 2 could help Tesla return to vehicle growth.
Analysts Perspectives
Skepticism from Bears
Despite these positive signs, bears remain skeptical. They question the monetization of AI and FSD technology while focusing on margins and valuation. Oppenheimer analysts believe the value of Tesla’s FSD/AI platform will be a determining factor for the stock’s future performance.
Valuation Concerns
The company’s valuation continues to be a topic of debate. While Tesla is seen as a leader in FSD and AI, there is uncertainty about how effectively it can monetize these technologies.
Financial Projections
FSD Subscription Model
Based on a $99/month subscription fee and 35%–50% net margins, Oppenheimer analysts estimate $0.60–$0.85 in GAAP EPS for every 5 million FSD customers. Given Tesla’s total sales of about 6.3 million cars, this presents a significant revenue opportunity.
Robotaxi Fleet Model
In a potential robotaxi fleet model, analysts project $0.40–$0.90 in GAAP EPS for every 100,000 vehicles. This model assumes a $0.60/mile driver replacement value, 40%–60% utilization, and 35%–50% net margins, requiring further commercialization of driverless technology.
Upcoming Insights
Investors can expect more details about Tesla’s plans during the 2Q24 earnings call. This will provide further clarity on the company’s strategy and financial projections.
Considerations for Investing
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Final Thoughts: Is TSLA the Right Choice?
With Tesla’s recent performance improvements and strong future potential in AI and FSD, is it the right time to invest $1,000 in TSLA? Consider the following points:
- Positive Momentum: Recovery in vehicle sales and strong energy storage sales indicate positive momentum.
- Future Growth Drivers: AI and FSD technology, along with potential new vehicle models, present significant growth opportunities.
- Valuation Concerns: Skepticism remains about monetizing AI/FSD and overall valuation.
- Upcoming Insights: The 2Q24 earnings call will provide more information on Tesla’s plans and financial outlook.
