Tesla Stock Is Slipping: Why You Should Buy This Stock Instead
Tesla has been in hot water recently. Deliveries were subpar this quarter and its first quarter earnings — released April 23 — were disappointing. In turn, this has worried many investors about the stock’s trajectory.
“We experienced numerous challenges in Q1, from the Red Sea conflict and the arson attack at Gigafactory Berlin, to the gradual ramp of the updated Model 3 in Fremont,” Tesla said in the earnings report. The company added that global electric vehicle (EV) sales continue to be under pressure as many carmakers prioritize hybrids over EVs.
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The Impact of the Stock’s Slide
Tesla’s total revenue of $21.30 billion was down 9% year-over-year and was below analysts $22.22 billion estimate, according to a Wedbush Securities note. This was the sharpest year-over-year decline since 2012, as reported by CNBC.
“The focus for us and investors was around the blueprint and roadmap for growth as Musk and Tesla are facing a Category 5 storm after a Cinderella ride the last few years,” Wedbush Securities analyst Dan Ives said in an April 29 note.
In turn, the stock took a hit in the following days — although it has now rebounded following the company’s getting the long awaited full self-driving (FSD) approval in China on April 29.
“The FSD vision in China is becoming a reality for Tesla. While demand challenges exist in China for Tesla, the Street is looking through this painful transition period for the long term growth story to emerge for Musk & Co. with FSD a key ingredient in that recipe for success,” Ives said.
As of April 29, the stock is down 22.3% year-to-date, yet, it’s up 18.75% in the past year and up 9.7% in the past month.
And as of April 29, the company’s market cap stood at $604.89 billion.
The Wall Street Journal reported in March that the stock’s slide pulled Tesla out of the top 10 biggest U.S. companies by market cap — and hadn’t been outside the top 10 since January 2023.
Visa, on the other hand, took the 10th spot at $563.4 billion at that time.
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How Visa compares, as of April 29
Market cap: $543.89 billion
Year-to-date: 5%
Past year: 16.9%
Past month: -2.32%
Meanwhile, on April 23, Visa released its second quarter earnings, which beat analysts’ expectations.
Ryan McInerney, CEO of Visa, said in the release that overall payments volume grew 8% and cross-border volume grew 16%, driven by stable consumer spending.
“As we head into the second half of the year and beyond, we remain focused on the trillions of dollars of opportunity in consumer payments and new flows and on continuing to deepen our partnerships with clients around the world by adding value across our network of networks,” McInerney said.
And according to TipRanks, analysts have a Strong Buy opinion on the stock, with 23 Buys, three Holds and no Sells opinions.
“After an 18.5% rally in its share price over the past year, the average Visa price target of $384 per share implies 13.24% upside potential,” as reported by TipRank.
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This article originally appeared on GOBankingRates.com: Tesla Stock Is Slipping: Why You Should Buy This Stock Instead
