Is it too late to buy Tesla stock as it rallies to a new all-time high?

on Oct 22, 2021
Updated: Aug 31, 2022
  • Tesla shares on Friday advanced to hit a new all-time high of $910.
  • The company announced its most recent quarterly results on Wednesday, beating analyst estimates.
  • Tesla offers exciting growth prospects at steep valuation multiples.

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On Friday, Tesla Inc. (NASDAQ:TSLA) shares advanced to trade at a new all-time high of $910, pushing its market cap above $900 billion. The current rise in the stock price is driven by the company’s impressive quarterly results announced on Wednesday.

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Tesla posted FQ3 non-GAAP earnings per share of $1.86, outperforming the consensus for analyst expectations of $1.61. In addition, its GAAP EPS of $1.44b beat the Street forecast of $1.14, while revenue for the quarter increased by nearly 57% from the same quarter a year ago to $13.76 billion, $60 million ahead of estimates.

Tesla’s revenue benefited from significant growth in sales from China, while its gross margin also contributed to the rise in the stock price after beating estimates by about 200 basis points.

Is Tesla still a good bet?

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From an investment perspective, Tesla trades at significantly high P/E ratios of 467.57 for the trailing 12-month period and 122.38 forward. As a result, value investors may opt for alternatives in the market.

However, the company’s earnings growth prospects of 165% this year, and an average of 54% for the next five years, make it a compelling option for growth investors.

Therefore, with recent results backing current growth forecasts, it may not be too late to invest in TSLA shares.

Source – TradingView

Technically, Tesla shares seem to have recently spiked to complete an upward breakout from an ascending channel formation. As a result, the stock has rallied to the overbought conditions of the 14-day RSI, creating an opportunity for a pullback.

However, with investors seemingly reacting late to its impressive quarterly performance, the current rally may not be over. Therefore, it may be best to target extended gains at about $958.57, or higher at $1,010, while $857.81 and $801.60 are support levels.

Tesla looks like a buy

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In summary, although Tesla shares have rallied to new all-time highs, thus crossing to the overbought territory, recent results could continue to propel the rally towards $1,000 per share. 

Therefore, it may not be too late to buy TSLA stock.

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