Ever since Tesla was founded, it seems like questions have always surrounded it. Whether it’s questions about the viability of an electric car company, what the battery technology would be like or the overall economics of the manufacturing process, Tesla has navigated through them all and has grown their footprint in the process. With that growing footprint and more consistent profitability, its share price has also increased. When you’re considering investment strategies, take a close look at Tesla and what the future may hold for the company.
Will Tesla Remain A Popular Name?
One of the biggest questions experts have had about Tesla is how long the company will stay relevant. The high price tag of its electric cars hasn’t deterred consumers and it appears the market was bigger than many expected. While it has been rumored that other car manufacturers will jump into the electric car niche and offer quality options at cheaper prices, those haven’t come to fruition. And considering Tesla is planning to offer lower-priced models in the future, consumers who have wanted a Tesla but couldn’t afford the high price tag may jump on the opportunity to own one.
Tesla’s Debt Will Be Present For Many Years
As an investor, you should feel good about Tesla being a quality name brand five or ten years from now. But you also have to look at their debt levels. While they have a high value and are worth upwards of $12 billion, their debt level is also a little more than $12 billion. With a cash flow of just $2.6 billion, paying off debt is going to be a major challenge for Tesla. Technologically advanced vehicles cost more to manufacture, so it’s not unrealistic to think Tesla will be in debt throughout the decade.
High Valuations Make Tesla A Risky Investment
Even with the high debt levels, Tesla still has a high business valuation with a stock price of $800 per share or higher. When you put everything about Tesla together, it’s difficult for experts to see how the company will live up to the high valuation it has, but the opportunity for great potential is there. The good thing for an investor to consider is the company has built a solid foundation, so the chances are low that the company will go under or become irrelevant any time soon. However, there’s also no guarantee that it will ever live up to the lofty valuations it has been given.
Stock Investing Info helps investors understand which investment strategies fit their risk tolerance and overall financial goals the best. When considering your portfolio management, Tesla is an expensive investment, but its future potential can’t be overlooked. It’s a company that many investors have an interest in and are waiting for the price to fall and take advantage of at the right moment. To learn more about Tesla’s outlook and how it can fit into your investment strategies, contact us toda