But that's still a solid buying opportunity for long-term investors. As noted, today the EV maker's stock is down to around $700 a share, which hurts if you got in near the top, but means you're still doing phenomenally well since the IPO. The stock is still reasonably valued despite a recent bounce off its lows. Regardless of how long you've been putting your money to work in the stock market, it's been a challenging year. Not only is it seeing more competition from upstarts like Rivian and Lucid, which want to break into the market, but established automakers like Ford, GM, and Toyota are vying for a slice of the pie, too. As for how shareholders would fare longer-term, if you had invested $1,000 in Tesla one year ago, on Aug. 11, 2021, your investment would be up by about 23%, according to CNBC calculations, for a . There have been two Tesla stock splits in its corporate history: To compare apples to apples, this means that the cost basis of the initial purchase price should be divided by 15, as one share of Tesla stock in 2010 would have turned into 15 shares by 2023.On a split-adjusted basis then, the closing price of Tesla stock on June 29, 2010 was $1.59. Electric vehicle (EV) leader Tesla (TSLA 2.57%) wasn't always the household name and portfolio-changing stock it's viewed as today. Authors may own the stocks they discuss. JPMorgan is among possible First Republic Bank bidders. It wasn't until 2020 that Tesla turned its first full-year profit. (Getty Images). The financial regulator alleged his claims that he had "funding secured," were false and misleading. 3:13 PM ET Who's better to bet on than Musk? Over the same time period, the S&P 500 index would have given you a 142.4% return. Nous, Yahoo, faisons partie de la famille de marques Yahoo. A Division of NBC Universal, Smith Collection/Gado | Archive Photos | Getty Images, How this FIRE couple retired in their 30s with $870K in Arizona, How much you'd have if you invested $1,000 in the S&P 500 a decade ago, How much money you'd have if you invested $1,000 in Microsoft 10 years ago, Why you may want to be skeptical of funds that invest like politicians, Why procrastinating on your IRA contributions could cost you thousands, Mark Cuban shares his No. Continue reading, Plus500. Sign up for free today. Here's Why. 2000-2023 Investor's Business Daily, LLC. Had you invested $10,000 in Tesla stock back in 2019, your investment would be worth more than $90,000 today. Finally, to reap the enormous rewards an early Tesla investor would be sitting on today, you'd have to keep the faith and hold as the EV innovator lost money year after year for a full decade. Invest better with The Motley Fool. And at its current value, Tesla is worth roughly five times more than Toyota Motor (TM), making it the most valuable automaker in the world. The magnitude of Tesla's boom is almost difficult to fathom. That's partly playing out in his company's stock performance, but also because taking out a $6 billion loan backed by Tesla shares to make the acquisition has that effect. *Average returns of all recommendations since inception. It's not likely Tesla will maintain that kind of growth. Now a decade later the Tesla share price has skyrocketed up to $563 per share. The International Energy Agency said that there were 16.5 million EVs on the road as of 2021, but that could grow to 350 million by 2030, depending on how charging infrastructure develops and the availability of resources for batteries. That proof of profitability had much to do with the stock's lucrative run from 2019 to the present day. Don't miss: If you invested $1,000 in Chipotle 10 years ago, here's how much money you'd have now. Sign up for stock news with our Invested newsletter. A Tesla Model S charging. mesurer votre utilisation de nos sites et applications. Five years ago, on Nov. 2, 2016, Tesla was trading at around $38 per share. In fact, the S&P 500's first-half performance was its worst in over a half-century. Although hybrid vehicles like Toyota Motor Corp.'s (TM) Prius had been around for some time, they certainly weren't sports cars and were a far cry from what one might consider luxury vehicles. Accounting for the. Not many people. Despite Tesla's sudden spike, the company's faced past challenges that caused its market performance to falter. Over the past five quarters, it's produced a profit based on generally accepted accounting principles (GAAP) of between $1.14 billion and $3.32 billion. Long-term investors might prefer these low-cost Fidelity mutual funds as core portfolio holdings. In stark contrast to the $1.16 million the Tesla IPO investor would be sitting on, a humble S&P 500 investor who put $10,000 into the benchmark index on the same day in 2010 would have. But this doesn't mean that the S&P is a worse investment. It's going to take decades for this vehicle replacement cycle to take shape, which provides Tesla with a long runway to grow its business. Tesla (NASDAQ: TSLA) became a publicly traded company in June 2010, and back then, electric vehicles were the whole of its business. Here's Why. Investors May Not Have Seen the Worst of Tesla Stock. So, if you had invested $10,000 at this price, you would have acquired 588 shares. Weve curated the best of the Internet so you dont have to spend hours scrolling. A $1,000 investment on Nov. 2, 2020 would be worth around $2,940, representing a return of 193%, according to CNBC calculations made Wednesday morning. Get instant access to exclusive stock lists, expert market analysis and powerful tools with 2 months of IBD Digital for only $20! BREAKING: Futures Steady, First Republic Fate In Focus. By comparison, a $1,000 investment in the. Read our disclaimer. Over the trailing-10-year period, the S&P 500 has returned a hearty 183%, and that's not including dividends paid. TSLA stock, however, opened for trading at $19 per share, and finished the day at $23.89 a stellar one-day gain of 40.5%. Investors looking for companies prepared to weather uncertain times can consider these financial stock picks. Nearly a decade later, a $1,000 investment in Tesla made in 2010 would be worth more than $36,000 as of Feb. 4, 2020, according to CNBC calculations. In short, RECs are inflating how profitable Tesla really is, which makes its nosebleed valuation that much worse. Your accounts lets you Digg (upvote) stories, save stories to revisit later, and more. Go back a few more years and your return is. Si vous ne souhaitez pas que nos partenaires et nousmmes utilisions des cookies et vos donnes personnelles pour ces motifs supplmentaires, cliquez sur Refuser tout. If you're investing with a multiyear horizon, the EV maker's expected growth will whittle away at that valuation reasonably quickly. Follow Matt Krantz on Twitter @mattkrantz, How A 69-Year-Old Made A $481 Million Coronavirus Stock Gain, MarketSmith: Research, Charts, Data And Coaching All In One Place, 12 Stocks Turned $10,000 Into $413,597 In 12 Months, Check Out IBD's New IBD Live Panel Discussion, Extended Rally, Tesla Climax Run Are Volatile Mix; Nio Unveils Luxury EV. Experts like CNBC's Jim Cramer have described the stock as going "up endlessly on nothing.". That's already higher than what analysts think the stock should be worth in 12 months, or 910.94 a share. If you are thinking about getting into investing, experts often advise starting with index funds, which hold every stock in an index, such as the S&P 500. A $1,000 investment then would have grown 3,025% and be worth around $31,286 as of Wednesday morning. This video will highlight just how much . Subscribe to our daily newsletter to get investing advice, rankings and stock market news. That was firmly above its indicated range of $14. If you had invested in Tesla last November, when the stock was worth just over $400 a share, you would have nearly tripled your money. The same $10,000 put into the S&P 500 during that time grew just 272% to $37,115. Instead, the CEO is planning on requiring candidates to "pass a hardcore coding test" and have a "deep understanding" of artificial intelligence. A young and growing business often loses money, but investors will eventually demand profits to know that the business is sustainable. Tesla (NASDAQ: TSLA) became a publicly traded company in June 2010, and back then, electric vehicles were the whole of its business. To make the world smarter, happier, and richer. That's just 14% compounded annually. As CEO, Musk has brought four EVs into production, recently oversaw the opening of two new Gigafactories, and has offered plans to take the Cybertruck and Semi into production as soon as next year. Even having just one of these game-changing stocks in your portfolio for the past decade could have resulted in life-changing wealth. The company had its ups and downs over the years, facing the threat of bankruptcy as recently as between 2017 and 2019, when Tesla increased the production volume of its Model 3. Still, Tesla is the biggest, most advanced EV manufacturer. To begin with, the company is being treated as if it's not cyclical and will somehow escape the supply chain challenges currently afflicting other automakers. No, Tesla is not likely an overnight multibagger anymore, like it was in 2019. Investors know that even though Tesla (TSLA 2.57%) is trading sharply lower today compared to its all-time high last November, those who took a stake in the electric vehicle (EV) manufacturer's initial public offering (IPO) in 2010 would still be fabulously wealthy. But among the S&P 500's top-performing stocks over the past decade, one company is in a class of its own: electric-vehicle (EV) manufacturer Tesla (TSLA 2.57%). The content Tesla stock plunged 65% in 2022 and hasn't fully recovered. To make the most of its first-mover advantage, Tesla had to rapidly grow its production capacity, which it did at a prodigious pace: In 2010, the company delivered less than 1,600 Tesla Roadsters, which was then its only vehicle. And that's no mystery for growth investors who know what to look for. In particular, nearly every projection offered by Musk for when a new EV or technology will become available fails to come to fruition. Accounting for this split, Tesla'sIPO price was roughly $1.13 per share. In addition to outpacing its North American competition in terms of production, the company's batteries provide better capacity, range, and power than virtually all of its mostly nascent EV competitors. It only passed Toyota, now the second-largest automaker in terms of market cap, last year, but is now nearly $900 billion more valuable. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services. Funding secured.". Tesla crossing that threshold to positive cash flow showed investors that the business was sustainable. First, IPOs are infamously bad times to buy. Investors May Not Have Seen the Worst of Tesla Stock. The information has been obtained from sources we believe to be reliable; however no guarantee is made or implied with respect to its accuracy, timeliness, or completeness. Best Parent Student Loans: Parent PLUS and Private. Through the first six months of 2022, the company has delivered 564,743 EVs. In order to combat climate change, most developed countries are emphasizing clean-energy initiatives. Tesla went public on June 29, 2010, at a price of $17 per share, above its expected range of $14 to $16 per share, and last year exceeded $1,200 per share, which was after a 5-for-1 stock split in 2020 when shares were trading for over $2,200 each. 86% of retail CFD accounts lose money, Elon Musk Shares His Superpower, Explains Why He's Best-Suited To Comment On The Economy, Elon Musk Gives Dire Warning On Economy If Fed Doesn't Change Course: 'Mark My Words', Elon Musk expects to spend $2 billion on Starship rocket after first launch explosion 'slightly' exceeded expectations. That works out to a more than 70% average annual return. On Monday, upon news of rental company Hertz making a huge purchase for their fleet, Tesla's stock became valued at a record $1,023.59. The Motley Fool has positions in and recommends Tesla. Tesla lost money on a net income basis every year since it was founded in 2003, until 2020. Youre reading a free article with opinions that may differ from The Motley Fools Premium Investing Services. Tesla was founded in 2003 and went public in 2010. Cost basis and return based on previous market day close. All Rights Reserved. Over nine years and four months, that's an average annual. The company has several irons in the fire, though investors must see how these opportunities develop over the coming years. Here's Why. To make the world smarter, happier, and richer. A Division of NBC Universal, Here's what universal basic income could mean for Americans, Here's how much you would have if you invested $1,000 in Nike ten years ago, Taylor Swift avoided an FTX lawsuit by asking a simple question, This 33-year-old went from a $60,000 salary to $140,000 in just 5 yearsher best negotiation advice, 4 things to know before taking an employee buyout, How much you'd have if you invested $1,000 in the S&P 500 a decade ago, Why a Harvard expert 'takes issue' with Zuckerberg's 'horrific' Meta layoffs, past returns do not predict future results, Ron Baron predicted Tesla's value will exceed $1 trillion in the next 10 years, on retail trading platforms like Robinhood, an investing app that's often favored by millennials, letter on Tesla's website explaining his thinking. The company is expected in 2022 to make $8.94 a share on an adjusted basis, up nearly 300% from 2020. Get Make It newsletters delivered to your inbox, Learn more about the world of CNBC Make It, 2023 CNBC LLC. If you'd invested 1,000 in Tesla Motors, Inc. (TSLA) on March 7, 2011, today that investment would be worth. It's been an amazing more than decade-long ride for Tesla (TSLA) investors literally better than any other S&P 500 stock. Investors look to the precious metal amid market uncertainty. That was firmly above its indicated range of $14 to $16 . If that were all there was to the story, this investment would have walloped the wider market over the last 13 years, rising nearly sevenfold. Early investors are still sitting pretty. Digg is an independent, advertiser-supported website and may receive compensation for some links to products and services throughout this website. That put the EV maker on the path to achieve Musk's goal of delivering 20 million Teslas by 2030. Cost basis and return based on previous market day close. Over the same time, the vaunted S&P 500 has grown at an annualized rate of 11.3%. Despite a sharp rebound in the early months of 2023, investors who acquired the stock in late 2020 are still treading water, and anyone who bought in at all-time highs just a year later is still nursing a more than 50% loss on paper. Despite a sharp rebound in the early months of 2023, investors who acquired the stock in late 2020 are still treading water, and anyone who bought in at all-time highs just a year later is still nursing a more than 50% loss on paper. Why Is Everyone Talking About Tesla Stock? It enacted a 5-for-1 split on Aug. 31, 2020, and recently completed a 3-for-1 split on Aug. 25, 2022. Last week, Musk announced he's recruiting new staffers for Tesla's artificial intelligence team and he doesn't care if you have a high school degree. Every double-digit percentage decline in the major U.S. indexes throughout history (save for the current bear market) has eventually been cleared away by a bull market rally. Image source: Tesla. Now, shares have rebounded to a forward P/E of 49. Tesla is infamous for unveiling a product (like the Cybertruck) and taking several years to bring it to market. A $10,000 investment in TSLA on the day of its IPO would be worth more than $1.16 million as of April 6. Sent every morning. By comparison, a $1,000 investment in the S&P 500 would have earned a total return of just over 281% over the same period. Target-date retirement funds aren't for everyone. Is Elon Musk Listening? This doesn't factor in its other business segments, including commercial vehicles (the Tesla Semi), renewable power, and Optimus, a humanoid robot it plans to mass produce by 2027. Shares of Tesla are up more than 50% since the beginning of October, and the company's market cap has grown to more than $1.2 trillion. As a result of the settlement, Musk and Tesla each paid a $20 million fine, and Musk was forced to resign from his chairman role on Tesla's board. Despite being a visionary, Musk has created all sorts of legal, financial, and operating headaches for the company he runs. Where Would You Be If You'd Invested $1,000 in Tesla Five Years Ago? The major indexes are near 2023 highs after a big shakeout. Learn how to trade stocks like a pro with just 3 email lessons! A lot of that has to do with the introduction of the Model 3 and Model Y, the mass-market sedan and crossover EV, respectively. Electric vehicles giant Tesla Inc. (ticker: TSLA) is a household name today. By signing in you agree with ourcommunications and usage terms. But as deliveries increased, you can see how free cash flow turned positive and kept climbing with deliveries. At a market capitalization of roughly $600 billion, it's one of the 10 largest public companies in the U.S. That said, the stock's medium-term performance has been lackluster. Can Earnings Recharge Electric Vehicle Stocks? At the time of its IPO, Tesla was undergoing an ambitious experiment that CEO Elon Musk has since admitted was more likely to fail than succeed. A similar investment in the S&P 500 would have given you a 357.4% return. Given the company has become the largest player in that industry globally, it's safe to say its journey so far has been a wild success.But Tesla continues to expand into new areas with astronomical potential, which makes its stock tricky to value. Tesla outperformed every single large stock currently in S&P 500 plus all those on the midsized S&P 400 and S&P 600 small caps on a percentage basis, shows an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith. But the biggest red flag of all might be Elon Musk. In 2019, it was reported that Tesla brought in $24.6 billion in revenue, which is a $2.8 billion increase from the year prior. Futures Steady, First Republic Fate In Focus, following the 2008-2009 Financial Crisis bailouts, already higher than what analysts think the stock should be worth, Tesla Stock Vs. BYD Stock: Tesla Tries To Halt Slide; China EV Giant Races Into Buy Area, Top 5 China Stocks To Buy And Watch: Tesla EV Rival BYD In Buy Area. The Motley Fool has positions in and recommends Tesla and Twitter. Whether you're a seasoned investor or just starting out, I'll help you stay up-to-date on all things related to the stock market. The most heavily shorted stocks on Wall Street include three electric vehicle-related names, Shares of this Swedish EV maker could nearly double, Cantor Fitzgerald says. Tesla's stock surged a whopping 23% on Tues. Feb 4, 2020, pushing its market value up more than 3,600% since the electric-car maker first sold stock in 2010. These mutual funds from Charles Schwab offer a combination of broad diversification and low fees. And if you invested in Tesla in 2010, when it made its initial public offering, that investment could have paid off, too. 1 strategy for starting a lucrative business, stock market has historically increased in value over time. entities, such as banks, credit card issuers or travel companies. Past performance is not a reliable indicator of future results Tesla Seasoned investor Warren Buffett agrees that it's a smart idea to start with index funds, in part because they fluctuate with the market, making them less risky than individually selected stocks. The Motley Fool recommends the following options: long January 2024 $47.50 calls on Coca-Cola. It has a 75% share of the EV market, and industry site Cox Automotive said Tesla sold more luxury vehicles in the U.S. in the fourth quarterthan Audi, BMW, Lexus, and Mercedes-Benz. Enjoy your new account! By December 2019, its shares had reached an all-time high with a share price of $393.15 which even surpassed intraday highs reached when CEO Elon Musk sent his "funding secured" tweet. The new era of energy production is linked to old-school metals extraction. Offers may be subject to change without notice. Tesla is now showing it is a profit machine. Why Is Everyone Talking About Tesla Stock? Artificial Intelligence Stocks: The 10 Best AI Companies. All rights reserved. The other 96% collectively matched the return of U.S. Treasury bills. Making the world smarter, happier, and richer. Go back a few more years and your return is even greater. Here's a snapshot of how the markets look now. For those of you keeping score at home, this equates to a 26,332% increase in value in just over 12 years. After all, Coca-Colatrades at roughly half Tesla's P/E but is expected to grow earnings only a quarter as fast as Tesla. Amazon Dives, While First Solar Plunges 12% On Earnings Miss. Tesla, which has managed to garner the reputation of a gold standard over the years, is now a far bigger entity that what it started off since its IPO in 2010, with a market capitalization. The Motley Fool has positions in and recommends Tesla. Shares of Tesla are up more than 44% just this past 12 months to 1,170 apiece. Sign up now: Get smarter about your money and career with our weekly newsletter, Don't miss: Jay Leno on why he still works at 71: I don't want to be 'a rich guy that sits in the pool', Get Make It newsletters delivered to your inbox, Learn more about the world of CNBC Make It, 2023 CNBC LLC. Here's Why. TSLA Performance vs. the. Elon Musk Cut Off OpenAI's Access To Twitter's Data, Report Reveals. are thinking about getting into investing, Warren Buffett agrees that it's a smart idea. Analysts think this is the year Tesla drives even further into the black. What Tesla as a company has done in the last dozen-plus years is nothing short of miraculous, and its stock price has rightfully ballooned along with profits. Pour en savoir plus sur la faon dont nous utilisons vos donnes personnelles, veuillez consulter notre politique relative la vie prive et notre politique en matire de cookies. But revenue growth is still accelerating. Here's how much a $10,000 investment in Tesla's IPO would be worth now Tesla hit the public markets in June 2010, priced at $17 per share. Shares of GM are up about 189% in the past 10 years since being relisted in November 2010 following the 2008-2009 Financial Crisis bailouts. Tesla went public on June 29, 2010 at $17 per share. The story for long-term shareholders, however, is much different. That works out to a more than 68% average annual return. Here's Why. Investors May Not Have Seen the Worst of Tesla Stock. Tesla's 2022 EPS of $4.07, growing 24% annually for five years, puts 2027 EPS at $11.93. If you invested $10,000 with founder Elon Musk 10 years ago, your stake would be worth $2.1 million now. Get access to free IBD eventsonline & in-person! But even a conservative run through the math shows that it can still be a worthwhile investment. Nonetheless, the company is worth substantially more today than it was at its initial public offering (IPO) -- even after accounting for the 62% drop in its share price this year.Here's how the company got there, and just how much early investors have been rewarded. [ See: Artificial Intelligence Stocks: The 10 Best AI Companies.] As a reference, analysts call for earnings per share (EPS) to average 24% annual growth over the next three to five years. Over the past roughly 10 years, Tesla's market value soared $1 trillion to hit $1.18 trillion. For those investors, we're talking about a near 13,800% increase in value,meaning a $10,000 investment 12 years ago would be worth $1.39 million today. Like this story? In other words, a $10,000 investment in Tesla's IPO in 2010 would now be worth a staggering $2,643,178. Tesla's greater than 26,000% gain since its IPO is the result of investors' faith in Elon Musk as a visionary as well. Youre reading a free article with opinions that may differ from The Motley Fools Premium Investing Services. Get market updates, educational videos, webinars, and stock analysis. What about General Motors (GM) and Ford (F)? As a reminder, you can change your profile and email settings in your profile. Earnings growth will have a significant impact on investment returns as companies mature. Yet among the 500 companies that make up the index, 20 of them have returned approximately 1,100% or higher over the trailing decade. Tesla has been an immensely lucrative stock over its lifetime. Copyright 2023 Digg All Rights Reserved. And while it's a nice thought experiment to see what a $10,000 investment in Tesla at its IPO would be worth today, choosing these diamonds in the rough on Wall Street is exceedingly difficult to do in practice. Comparative assessments and other editorial opinions are those of U.S. News This Truck Giant Leaves Tesla Semi In The Dust As Breakout Nears. That strong performance comes even though the stock has fallen more than 50% from its high in November 2021. Helpful "tripwires" can guide your decision-making. With hopes this high, there's little room for error. At market close on April 6, the stock closed at $185.06 more than 116 times its adjusted closing price on the first day of trading. Tesla remains the most valuable auto stock on the market. The Motley Fool has a disclosure policy. But due to several aggressive stock splits in recent years, Tesla's long-term performance is even more impressive. If you had invested $10,000 with Tesla 10 years ago, your stake would be worth $1.8 million now. TSLA Revenue (TTM) data by YCharts. Now that Tesla is profitable, looking at its potential runway to grow earnings will give clues to the stock's potential. Making the world smarter, happier, and richer. Learn More. On the same day, Musk also published a letter on Tesla's website explaining his thinking. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. The. In my daily YouTube. If you had invested $5,000 and been lucky enough to get in at the IPO price of $17, your Tesla stock would be worth $102,050 today. Tesla went public in 2010 at a price of $17 per share. Tesla recently closed out its 2022 fiscal year, delivering 1.31 million vehicles. In stark contrast to the $1.16 million the Tesla IPO investor would be sitting on, a humble S&P 500 investor who put $10,000 into the benchmark index on the same day in 2010 would have $39,424 at market close on April 6 just 3.4% of what the early electric vehicle believer would've ended up with. Tesla hit the public markets in June 2010, priced at $17 per share. While Tesla shares suffered due to Musk's Twitter activity, its stock has been on the rebound. These companies stand to benefit from a generational shift in consumer behavior. In fact, shares traded below those levels for the majority of normal trading hours, so even this price is somewhat conservative. To build on this point, Tesla's shares ended this past week at a nosebleed multiple of 56 times Wall Street's forecast earnings per share (EPS) in 2023. While Tesla has performed well overall, any individual stock can over- or underperform and past returns do not predict future results. Tesla's stock is certainly on hyperdrive, explaining its strong 99 IBD Composite Rating. That's already an enormous performance gulf, but those differences become even more magnified over time. This would give Tesla roughly 13.1% market share of EVs sold last year.
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