Tesla(US:TSLA) The Motley Fool·2024-12-30 09:26Tesla's Business Overview - Tesla's automotive sales accounted for 79% of total sales in Q3, with revenue growing only 2% year over year due to high interest rates limiting consumer borrowing power [3] - The company's free cash flow in the most recent quarter was $2.7 billion, a 233% year-over-year increase, bringing total cash and investments to $33.6 billion [7] - Tesla is primarily an automaker but has other businesses including energy storage, solar products, and potential revenue streams from autonomous vehicle networks and humanoid robots [2][3] Market Performance and Valuation - Tesla's shares rose more than 70% in 2024, significantly outperforming the S&P 500's 25% gain [8] - The stock trades at a price-to-earnings ratio of 118, reflecting high investor expectations and leaving little room for potential setbacks [10] Growth Opportunities - Investors are optimistic about Tesla's future growth in electric car sales, energy storage, solar products, and its development of artificial intelligence software and hardware for autonomous vehicles [2] - The company is well-positioned in attractive growth markets such as electric cars and artificial intelligence [5] Investor Sentiment - Tesla's CEO Elon Musk's relationship with President-elect Donald Trump has fueled positive sentiment around the stock [8] - Some investors remain skeptical, believing the stock price reflects too much speculation and hope [10] Strategic Considerations - While Tesla has a strong balance sheet and profitability, its recent automotive sales growth has been anemic, raising concerns about its valuation [3] - Investors may consider waiting for a meaningful pullback in the stock price before buying, given its significant run-up in 2024 [5][9]