Investing a grand in Tesla shares a decade back would yield you this much now.
In the year 2015, a decade ago, the world experienced quite an eventful year. Almost 200 countries pledged to reduce emissions and promote renewable energy, Tom Brady and the New England Patriots found themselves in a deflation scandal, and same-sex marriage gained nationwide approval from the Supreme Court.
Let's discuss Tesla, the electric vehicle powerhouse, which back then was still known as Tesla Motors. The company had been making waves since its inception in 2003, with notable milestones such as debuting its first freestanding charging stations in 2012 and securing its first profitable quarter in 2013. And in 2015, Tesla ventured into the solar energy market. Imagining a hypothetical investment in Tesla shares at this time, let's see how your hypothetical $1,000 investment might have fared:
By 2025, that $1,000 would have ballooned to approximately $27,615. An astounding yearly average growth of about 39%, far surpassing the S&P 500's average annual gain of 12% (without dividends reinvested). With dividends reinvested, the S&P 500's return would reach 13%.
Tesla's powerhouse performance has earned it a spot among the "Magnificent Seven" stocks: Apple, Amazon.com, Alphabet, Meta Platforms, Microsoft, and Nvidia. But Tesla's shares are notoriously volatile, exhibiting significant fluctuations. Over the past year, they soared a remarkable 50%, but averaged only 2.49% growth over the past three years. Yet, over the past five years, Tesla's average growth rate was a robust 67.6%.
Looking ahead to 2025, pondering what to expect from Tesla stocks becomes crucial if you're considering investing.
Assessing Tesla's valuation is also crucial. Its stock value appears lofty, with a recent price-to-earnings (P/E) ratio hovering at 110, well above its five-year average of 77. Granted, its growth has been slowing, with an expense-to-sales ratio of 17.01. Nonetheless, Tesla is investing heavily in innovative technologies such as autonomous driving and battery advancements.
Analysts' 2025 predictions for Tesla stocks vary, with conservative estimates suggesting a price target of $212.00 per share, indicative of year-over-year growth estimates of -48.77%. Optimists, on the other hand, envision Tesla's stock reaching between $300 and $528 per share, influenced by favorable market conditions and technology innovations.
In terms of finance and investing, considering Tesla's impressive growth, some individuals might contemplate investing in its stocks. If one had hypothetically invested $1,000 in Tesla shares in 2015, it would potentially reach a value of approximately $27,615 by 2025.
To maximize returns, savvy investors often look at diversifying their portfolios, which may include considering investments in companies like Tesla known for their groundbreaking innovations in fields such as renewable energy and electric vehicles.