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When thinking of the best investments over the last decade, Tesla (TSLA - Free Report) shares undoubtedly come to many minds. Just look at the chart below – TSLA shares are up more than 14,700% over the last decade, absolutely crushing the S&P 500’s performance.
Image Source: Zacks Investment Research
However, the fun has come to a screeching halt in 2022, with Tesla shares down more than 14% and performing almost precisely in line with the S&P 500.
Image Source: Zacks Investment Research
It’s been a challenging road for many high-growth stocks in 2022 thanks to a Hawkish fed and geopolitical issues causing a storm of their own.
Still, Tesla currently carries a Zacks Rank #2 (Buy), indicating a favorable near-term earnings outlook.
In addition, the EV titan performed a 3-for-1 stock split in late August, making shares more accessible to all investors.
Should investors start considering Tesla shares with a much cheaper stock price and lowered valuation levels? Let’s take a deeper look.
Growth Estimates & Valuation
Undoubtedly a bullish signal, analysts have raised their earnings outlook significantly over the last 60 days across several timeframes.
Image Source: Zacks Investment Research
Tesla’s bottom line is in exceptional health – the Zacks Consensus EPS Estimate of $3.99 for FY22 reflects a stellar 80% uptick in earnings year-over-year. And in FY23, TSLA’s bottom line is forecasted to expand a further double-digit 30%.
Of course, the company’s top line is also in great shape; revenue is forecasted to climb a massive 60% in FY22 and an additional 41% in FY23.
Image Source: Zacks Investment Research
Further, Tesla carries a Style Score of an A for Growth.
It’s no secret that Tesla shares are pricey, with the company carrying a Style Score of a D for Value.
Currently, the EV titan carries a steep 10.9X forward price-to-sales ratio, well above its five-year median of 4.9X, and representing a rich 180% premium relative to the S&P 500.
Image Source: Zacks Investment Research
Earnings Performance
Tesla has a strong earnings track record, exceeding the Zacks Consensus EPS Estimate in nine of its previous ten releases. Just in its latest print, the company penciled in a substantial 25% bottom-line beat.
Top-line results have also been strong – Tesla has registered nine revenue beats over its last ten quarters. Below is a chart illustrating the company’s revenue on a quarterly basis.
Image Source: Zacks Investment Research
Bottom Line
Tesla shares have been an investor favorite over the last decade, and it’s easy to see why after viewing the share performance.
In 2022, sellers have hit the stock hard, causing it to decline dramatically. Rising interest rates and geopolitical issues have played spoilsport for many high-growth stocks all year long.
However, shares are much more affordable now post-split and after the valuation decline, perhaps intriguing long-term investors.
In addition, the company has enjoyed favorable earnings estimate revisions, has a strong growth profile, and has repeatedly exceeded quarterly estimates.
All in all, it seems that Tesla (TSLA - Free Report) has positioned itself nicely amid one of the most challenging macroeconomic backdrops in recent times.
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Are Tesla Shares Worth a Look Post-Split?
When thinking of the best investments over the last decade, Tesla (TSLA - Free Report) shares undoubtedly come to many minds. Just look at the chart below – TSLA shares are up more than 14,700% over the last decade, absolutely crushing the S&P 500’s performance.
Image Source: Zacks Investment Research
However, the fun has come to a screeching halt in 2022, with Tesla shares down more than 14% and performing almost precisely in line with the S&P 500.
Image Source: Zacks Investment Research
It’s been a challenging road for many high-growth stocks in 2022 thanks to a Hawkish fed and geopolitical issues causing a storm of their own.
Still, Tesla currently carries a Zacks Rank #2 (Buy), indicating a favorable near-term earnings outlook.
In addition, the EV titan performed a 3-for-1 stock split in late August, making shares more accessible to all investors.
Should investors start considering Tesla shares with a much cheaper stock price and lowered valuation levels? Let’s take a deeper look.
Growth Estimates & Valuation
Undoubtedly a bullish signal, analysts have raised their earnings outlook significantly over the last 60 days across several timeframes.
Image Source: Zacks Investment Research
Tesla’s bottom line is in exceptional health – the Zacks Consensus EPS Estimate of $3.99 for FY22 reflects a stellar 80% uptick in earnings year-over-year. And in FY23, TSLA’s bottom line is forecasted to expand a further double-digit 30%.
Of course, the company’s top line is also in great shape; revenue is forecasted to climb a massive 60% in FY22 and an additional 41% in FY23.
Image Source: Zacks Investment Research
Further, Tesla carries a Style Score of an A for Growth.
It’s no secret that Tesla shares are pricey, with the company carrying a Style Score of a D for Value.
Currently, the EV titan carries a steep 10.9X forward price-to-sales ratio, well above its five-year median of 4.9X, and representing a rich 180% premium relative to the S&P 500.
Image Source: Zacks Investment Research
Earnings Performance
Tesla has a strong earnings track record, exceeding the Zacks Consensus EPS Estimate in nine of its previous ten releases. Just in its latest print, the company penciled in a substantial 25% bottom-line beat.
Top-line results have also been strong – Tesla has registered nine revenue beats over its last ten quarters. Below is a chart illustrating the company’s revenue on a quarterly basis.
Image Source: Zacks Investment Research
Bottom Line
Tesla shares have been an investor favorite over the last decade, and it’s easy to see why after viewing the share performance.
In 2022, sellers have hit the stock hard, causing it to decline dramatically. Rising interest rates and geopolitical issues have played spoilsport for many high-growth stocks all year long.
However, shares are much more affordable now post-split and after the valuation decline, perhaps intriguing long-term investors.
In addition, the company has enjoyed favorable earnings estimate revisions, has a strong growth profile, and has repeatedly exceeded quarterly estimates.
All in all, it seems that Tesla (TSLA - Free Report) has positioned itself nicely amid one of the most challenging macroeconomic backdrops in recent times.