Confused About Tesla? Back To The Absolute Basics

Summary

• Tesla’s stock has delivered extraordinary risk-adjusted returns since IPO, but its volatility and Key Man Risk remain persistent concerns. Even the direction of the Key Man Risk effect is unclear.
• Automotive segment growth is plateauing in the bigger picture, but Energy is showing strong performance, partially offsetting EV declines amid rising competition and pricing pressure.
• Valuation is extremely high but not impossible to grow into, with current prices baking in perfect execution of unproven future business segments, leaving no margin for error.
• Given extreme uncertainty, high beta, and lofty valuation, Tesla remains a speculative play rather than a sound investment at this stage.

Step Back, Breathe

If you find yourself baffled by Tesla, you are not alone. This appears to be inherent to the stock, and opinions differ on whether this is a feature or a bug. Amid so much noise, so many headlines, and ambiguous signals from analysts

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.