Tesla's Growth Story Battles Valuation Concerns Amid Market Crosscurrents

Tesla Inc TSLA shares are trading lower during Thursday’s session as investors digest a mixed bag of recent company news, anchored by last month’s disappointing second-quarter earnings report.

What To Know: The electric vehicle maker reported second-quarter revenue of $22.5 billion, a 12% decrease year-over-year, falling short of consensus estimates. Automotive revenue saw a steeper 16% decline, and EPS of 40 cents also missed analyst expectations.

Compounding the pressure, Tesla faces intensifying international competition and softening demand in several key markets. While sales in Norway surged 24% in the first half of the year, this was an outlier against a broader trend of declining sales in other European countries like Sweden and Denmark.

In the UK, rival BYD saw a significant surge in July, a period where Tesla’s sales fell. BYD also achieved a new sales record in India, a market Tesla has just begun to enter.

Despite these headwinds, Tesla is pushing forward with its future roadmap. The company is actively hiring ‘Vehicle Operators’ in New York City for its nascent Robotaxi service and reaffirmed that a more affordable model is planned for the first half of 2025, with its Semi and Cybertruck productions slated for 2026.

The broader narrative is further complicated by CEO Elon Musk’s high-profile political ties and a potential dispute with Apple over the integration of his xAI’s Grok, creating a complex outlook for the stock.

Benzinga Edge Rankings: According to Benzinga Edge data, TSLA’s stock profile is one of a high-growth, quality company that is trading at a premium price. The stock scores exceptionally well on Momentum (84.77), indicating a strong recent price trend and positive investor sentiment.

It also shows robust scores for Growth (72.18) and Quality (73.14), suggesting the company has strong financial health and solid prospects for business expansion. However, this is sharply contrasted by a very low Value score of 9.27.

This metric implies that the stock is considered significantly overvalued based on its underlying fundamentals, making it an unattractive prospect for investors seeking to buy at a discount.

Price Action: According to data from Benzinga Pro, TSLA shares are trading lower by 2.30% to $331.56 Thursday. The stock has a 52-week high of $488.54 and a 52-week low of $202.59.

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How To Buy TSLA Stock

Besides going to a brokerage platform to purchase a share – or fractional share – of stock, you can also gain access to shares either by buying an exchange traded fund (ETF) that holds the stock itself, or by allocating yourself to a strategy in your 401(k) that would seek to acquire shares in a mutual fund or other instrument.

For example, in Tesla’s case, it is in the Consumer Discretionary sector. An ETF will likely hold shares in many liquid and large companies that help track that sector, allowing an investor to gain exposure to the trends within that segment.

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