Bull of the Day: Tesla (TSLA)

Tesla Stock OverviewZacks Rank #1 (Strong Buy) stock Tesla (TSLA) is the world’s leading electric vehicle (EV) and has evolved into a dynamic technology innovator (full disclosure: we are long the stock in the Technology Innovators portfolio since April).Though Tesla is much younger than competitors like Toyota Motors (TM), Ford Motor (F), and General Motors (GM), the company has managed to capture roughly half of the U.S. EV market. Unlike legacy automakers, Tesla is laser-focused on its EV segment and relies on little-to-no marketing to sell its vehicles. Tesla’s automotive business remains its most extensive, though it has steadily expanded its high margin energy generation/storage business.Tesla’s Intermediate Growth is Back on TrackAlthough Tesla’s earnings growth has stagnated recently, Zacks Consensus Estimates suggest that Tesla’s annual earnings will jump by a healthy 29.65% in 2025.Image Source: Zacks Investment Research3 Bullish Catalysts for Tesla StockBelow are three bullish fundamental catalysts that will drive earnings growth in the short term:1. Cybertruck Sales: Tesla CEO Elon Musk revealed that the Cybertruck became the third best-selling EV in the United States in the third quarter (only behind the Tesla Model Y & Model 3). As Tesla becomes more efficient at producing Cybertrucks, deliveries should soar.2. Lower Interest Rates: A more “Dovish” Federal Reserve benefits Tesla because it allows consumers to more affordably finance cars.3. China Stimulus: China’s floundering economy has adversely impacted Tesla’s Chinese sales. However, Chinese officials recently announced a sweeping economic stimulus package that should indirectly benefit Tesla in the region.Long-Term TSLA Stock Catalysts: Energy Storage & RobotaxiEnergy Generation & Storage BusinessTesla’s revenue from this business has exploded, growing at a triple-digit compound annual growth rate (CAGR) over the past three years. Though it remains a small segment of Tesla’s business, its robust growth and juicy margins should be a significant catalyst in the long term.RobotaxiMany investors falsely believe that Alphabet’s (GOOGL) Waymo cyber taxi service has a leg up on Tesla’s because it has been greenlighted in some major U.S. cities like San Fransisco and is in service, while Tesla still hasn’t gone live. Nonetheless, being the first to market is not enough to win the battle. Tesla has a massive edge when it comes to training their Full Self Driving model. As a result, Tesla expects that FSD will be safer than a human driver (< 1 accident reported every 550k miles traveled). Furthermore, Tesla is far more scalable than Waymo because it doesn’t rely on super expensive lidar sensors like Waymo. Though I see both companies ultimately succeeding, skeptics are very wrong to assume that Waymo will run away with cybertaxi supremacy just because they launched first.Is Tesla a “GARP” Play?Beyond its attractive growth prospects, Tesla boasts a very inexpensive valuation, historically speaking, making it an attractive “growth at a reasonable price” or GARP play. TSLA’s price-to-sales ratio is at its lowest level since 2020, right before TSLA shares vaulted more than 20x.Image Source: Zacks Investment ResearchLong Term TSLA Stock BreakoutEarlier this year, TSLA shares signaled a trend shift when they cleared a long-term downtrend line on the quarterly chart.Image Source: TradingViewBottom LineSeveral bullish catalysts suggest the worst is over for the leading EV maker. Tesla is expected to resume its hyper-growth phase while its valuation remains historically cheap.Free Today: Profiting from The Future’s Brightest Energy SourceThe demand for electricity is growing exponentially. At the same time, we’re working to reduce our dependence on fossil fuels like oil and natural gas. Nuclear energy is an ideal replacement.Leaders from the US and 21 other countries recently committed to TRIPLING the world’s nuclear energy capacities. This aggressive transition could mean tremendous profits for nuclear-related stocks – and investors who get in on the action early enough.Our urgent report, Atomic Opportunity: Nuclear Energy's Comeback, explores the key players and technologies driving this opportunity, including 3 standout stocks poised to benefit the most.Download Atomic Opportunity: Nuclear Energy's Comeback free today.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Ford Motor Company (F): Free Stock Analysis Report Toyota Motor Corporation (TM): Free Stock Analysis Report General Motors Company (GM): Free Stock Analysis Report Tesla, Inc. (TSLA): Free Stock Analysis Report Alphabet Inc. (GOOGL): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks