Is It Too Late to Buy Tesla Stock?

Tesla (NASDAQ: TSLA) has its fair share of fervent supporters and its fair share of critics. But this business has taken care of its investors, thanks to the inventiveness of founder and CEO Elon Musk. In the past 10 years, shares have soared 3,070% (as of Dec. 12), absolutely trouncing the overall market.

Tesla now trades not too far off its peak price from 12 months ago. Is it too late to buy this electric vehicle stock?

Tesla's valuation reflects market enthusiasm

In recent years, Tesla has seen sales growth slow. And its profits have been are under pressure. Nonetheless, the stock is very expensive. It trades at a price-to-earnings ratio of 307.

Based on the valuation, it's certainly too late to buy shares. The market is extremely enthusiastic about the business.

Looking out a decade from now

The only investors who think it's not too late to buy the stock are those who are convinced Tesla will find remarkable success with autonomous driving and robotics. Commercializing robotaxis on a global stage will bring in high-margin revenue for the business. And if the company can scale manufacturing of its humanoid robots, the financials could get a boost over the long term.

Tesla can penetrate what it believes are massive total addressable markets. This favorable outcome, which is unpredictable and might not happen, could lift the stock.

Neil Patel 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.