Is It Too Late to Buy Tesla Stock?
Key Points
Tesla's current price-to-earnings ratio of 316 is extremely disconnected from the company’s operations today.
The electric vehicle stock’s most bullish investors envision massive success in the future.
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Tesla (NASDAQ: TSLA), which is valued at a market cap of $1.1 trillion (as of April 8), has been a wonderful portfolio addition. In the past decade, shares in the innovative enterprise soared 1,920%.
If you're new to this electric vehicle (EV) stock, is it too late to buy now?
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I think it's certainly too late to buy Tesla shares if you believe the company will remain primarily an EV manufacturer. The business's EV deliveries declined in 2024 and 2025. Automotive revenue fell 10% last year.
At the stock's price-to-earnings ratio of 316, which any rational investor would agree is light years away from the current reality of Tesla's operations, it's best to stay away.
Tesla's most optimistic investors, though, have a different take. If you're extremely bullish on the company's future, then it's not too late to buy the EV stock. Should Elon Musk eventually make good on his promises, like advancing a robotaxi fleet to global adoption, as well as producing 1 million humanoid robots yearly to sell to commercial customers and individual households, then Tesla's earnings power could be significantly higher in the future.
The market's obsession with what Tesla could become one day is ruling the narrative that explains the valuation. In my view, though, it's too late to buy shares unless the valuation tanks.
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Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.
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