Tesla (NASDAQ: TSLA) is an EV manufacturer based in California. I am bullish on the stock.
It’s the automaker with a trillion-dollar market cap and a celebrity CEO. Tesla and Elon Musk are known far and wide — but that comes with a cost, as investors often hold up ultra-high expectations for Tesla.
In 2021, TSLA stock surpassed the $1,000 mark (technically for the second time, as there was a share split which reduced the price). With that, Tesla’s trailing 12-month price-to-earnings (P/E) ratio reached an eye-popping 345.
Meanwhile, supplies of critical automotive components are low and Tesla just released its highly anticipated delivery data. The billion-dollar question, then, is whether Tesla has kept pace with lofty expectations amid challenging conditions.
Great Work, Great Results
A timely tweet from Musk himself provided a concise summary of those results.
“Great work by Tesla team worldwide!” he exclaimed. As you can surely guess, the company’s reported delivery numbers beat people’s expectations.
There’s no denying that Musk’s team deserves a pat on the back. As it turned out, Tesla delivered 308,600 vehicles during 2021’s fourth quarter, easily beating the Wall Street analysts’ forecasts of 263,026 vehicles.
With that result, Tesla is truly on a winning streak. Impressively, the Q4 2021 result marked the sixth consecutive quarter in which Tesla posted record EV deliveries.
Not only that, but Tesla’s deliveries from October through December were up by around 70% year-over-year, as well as nearly 30% higher compared to the previous quarter’s also-record EV deliveries.
Beating the Odds
Back in October, Musk proclaimed that Tesla will be able to maintain an annual growth rate exceeding 50% for “quite a while.”
This might strike some folks as bragging, but after reading those delivery numbers, it’s hard to argue with Musk.
Plus, we have to bear in mind that Tesla achieved those numbers despite persistent supply-chain bottlenecks. This consideration makes the record delivery data even more impressive.
Musk has himself acknowledged this problem, saying, “2021 has been the year of super crazy supply chain shortages.” However, in October, Musk assured that he was optimistic that those supply-chain issues would pass in 2022.
Maybe he’s right about that, or maybe he’s not. Either way, Gene Munster, managing partner at venture capital firm Loup Ventures, offered praise for Musk’s team.
“They have beaten all the odds,” Munster declared. With that, he projected that Tesla’s deliveries will grow to 1.3 million vehicles in 2022, despite the ongoing supply-chain problems.
Wall Street’s Take
According to TipRanks’ analyst rating consensus, TSLA is a Moderate Buy, based on 14 Buy, eight Hold, and five Sell ratings. The average Tesla stock prediction is $1,030.08, implying 11.5% downside potential.
The Takeaway
No one is accusing Musk of being modest, but it’s hard to argue with the man and his company when they’re winning again and again.
It’s possible, then, that TSLA stock isn’t as expensive as it might appear to be. Sometimes, investors can forgive high valuation multiples and focus on a company’s performance.
In the case of Tesla, we can simply ignore Musk’s bragging and assess the delivery data — which, like it or not, is spectacular.
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Disclosure: At the time of publication, David Moadel did not have a position in any of the securities mentioned in this article.
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