I won't keep you in suspense. The answer is: $8,862.79.
That's how much money you'd have today if you had invested $1,000 in Tesla(NASDAQ: TSLA) stock five years ago -- and it's a pretty nice return, right?
Sure, there's been a lot of wailing and gnashing of teeth lately, a lot of proverbial clothes tearing, and sackcloth and ashes wearing, over the fact that Tesla stock has been cut in half from its 2023 high of nearly $300. But if you take the longer view, on April 15, 2019, Tesla stock closed at a split-adjusted price of $18.22 per share. It closed trading this past Monday at $161.48. Not quite a 10-bagger, but close.
Is Tesla stock still a buy?
Things look bleak for Tesla right now, with demand for electric cars slowing and Tesla laying off more than 10% of its workers this week. Tesla stock is down a lot on the bad news. But the good news about today's lower stock price is that it may be setting Tesla investors up to win some more extraordinary gains in the future.
From 2019, a year in which Tesla lost money, to 2023, the year it recorded a record $15 billion profit, Tesla stock surged more than 10x in price. This year, with analysts polled by S&P Global Market Intelligence forecasting Tesla earnings to decline 43% to $8.6 billion, the stock is down -- which is entirely to be expected. But what do you think might happen if Tesla survives its current troubles, and resumes growing earnings again?
Because that's what most analysts think is going to happen. Through 2028, most forecasts see Tesla tripling its 2024 earnings to end up with a $25.8 billion net profit in 2028 -- then slowing to a more modest mid-teens growth rate thereafter.
Granted, those profits are still quite a few years away. But for patient investors, Tesla stock still has the potential to deliver substantial profits.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.
