3 Reasons Tesla Stock Is a No-Brainer Buy in 2023
A couple of years ago, many would have laughed if you'd called Tesla's (NASDAQ: TSLA) stock a good value investment. But after a 64% decline over the last twelve months, the company finally looks cheap relative to its earnings and long-term potential. Let's discuss three reasons why the beaten-down automaker could be an excellent buy for long-term investors in 2023.
Like many companies, Tesla faces significant near-term challenges like inflation and rising rates, which increase the cost of capital and hurt growth stock valuations. Investors may also be concerned about the activities of the company's CEO, Elon Musk, who purchased social media company Twitter for $44 billion in October.
In 2022, the billionaire sold a whopping $23 billion worth of Tesla stock to help fund the acquisition. But while stock sales can hurt a company's price in the near term, this shouldn't mean much for fundamental-focused investors. Unlike equity dilution, where new shares are created, the sale of already-existing shares doesn't impact Tesla's value relative to its earnings or cash flow. While some believe the Twitter acquisition is a distraction for Musk, this fear also looks overblown.
Source Fool.com
