ALB Limited 06.04.2023

Does setbacks of Tesla Stocks indicates buying?

Tesla, the leader in electric cars, announced on April 4 that the company is officially operating in Turkey. Shares of the company, which will begin selling electric cars in Turkey, are traded on Nasdaq, the second largest stock exchange in the world by market value. The company had a very poor year in terms of performance last year, but the auditors did not meet the 50% sales stock target, such as problems related to the supply chain and mandatory temporary factory sales. The company had a very poor year in terms of stock performance, closing 2022 with a 65% loss in value. Slowing demand due to high purchases and rising interest rates could continue to negatively impact sales. To prevent the decline in demand, the company discounted some of its models by nearly 10% in March. The company's CEO, Elon Musk, explained that discounts increase sales.

Despite the drop in demand and other fundamental problems, the company has presented a not too bad balance sheet for the fourth quarter. After the balance sheet came out better than expected, the stock rose from $130 to $216. Even though it appears to be an electric vehicle and consumer products company, Elon Musk expresses at every opportunity that Tesla is actually an artificial intelligence (AI) company. A look at the vehicles produced by Tesla shows that Elon Musk has a point. The electronic devices used in the vehicles are state-of-the-art, and the innovative Autopilot feature sets the company apart from its competitors. Looking at the company's goals and projections, it plans to mass produce robotic cabs by 2024, and if the innovative products catch on and increase market share, it would not be surprising to see the company reach $843 billion in sales by 2026.

If we look at the P/E ratio and the revenue growth rate, we can assume that although the company is very expensive for an automaker, it should be considered a growth stock. Tesla shares, which were trading at $102 at the beginning of the year, gained more than 100% in a short period of 1.5 months, reaching $216. Since mid-February, it has shown a mixed picture within a narrow band. From a technical point of view, the level of 165 USD seems to be a strong support. If the news flow does not deteriorate in case of possible setbacks, these levels can be considered as buying opportunities.

Tags: Tesla, Stocks

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