Tesla Inc. is an innovative electric vehicle manufacturer, and one of the fastest-growing companies in its industry. Once one of the most heavily shorted stocks in the market, Tesla (NASDAQ: TSLA) is now a popular pick for investors looking towards a sustainable future.
Fiscal performance and operational improvements have turned the company’s stock around in the last year, giving it a higher valuation than some of the world’s largest automakers.
Here’s what investors need to know about the latest developments.
Tesla is Bigger than Toyota
Despite having nowhere near the production capacity or raw unit sales, Tesla is now worth more than Toyota, at least on the stock market.
When the closing bell sounded on Wednesday, the company had a market capitalization of $200.28 billion. This also puts it ahead of Ford, Fiat Chrysler, and General Motors, which have a combined market capitalization of just over $80 billion.
Tesla is also outperforming traditional growth stocks outside of its industry, including Disney, Exxon Mobil, and Coca Cola.
If Tesla were listed on the S&P 500 Index, it would be ranked 20th. However, it will need to generate sustained profitability over four consecutive quarters to meet the S&P’s listing criteria.
What’s Driving Growth?
Tesla’s market cap reflects its potential and operational improvements, rather than raw financial data. All of the key drivers can help to develop a deeper understanding of this stock and the company behind it.
- Tesla has expanded into China, one of the world’s largest electric vehicle markets. Its factory is already operational, removing tariff barriers.
- A German factory is in the early stages of development and is expected to begin production by July 2021. This will give the company tariff-free access to the European market.
- In its most recent fiscal quarter, the company reported its third consecutive quarterly profit. It generated earnings per share of $1.24, compared to the analyst estimate of -$0.36.
- The company is moving ahead with the production of its Cybertruck pickup, a vehicle that attracted 200,000 pre-orders when it was unveiled in 2019.
- Tesla has collected more data from self-driving and electric vehicles than any of its competitors. This can be used to improve future models and the technology behind them. Because Tesla was an early electric vehicle innovator, it will maintain a competitive edge for the foreseeable future.
Is Tesla a Smart Investment?
Tesla’s stock is expensive today and there’s a lot of speculation in it. However, for the right investor, it’s still a promising pick. It’s the world’s most mature all-electric vehicle company. It has mountains of usable data and rapidly evolving production lines.
Any investor looking for long term exposure to the electric vehicle market should consider Tesla stock today.
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