The Portfolio manager of Zacks Investment Management recently told Schwab Network that Tesla (TSLA) “has the best per capita margin in the automotive business, and its business model is still profitable.”
More importantly, Tesla can profit from all its self-driving products, and its power units can offset some of the contraction in its automotive business.
Mulberry asserted that at this time, the valuation of TSLA stocks had fallen enough to make the stock worth buying.
Tesla's active catalyst
Mulbury said Tesla's per capita margin is still higher than any of its competitors' profit margins, and its revenues are still growing at 18% to 20% annual editing.
Although the company's power units have grown 180% over the past three years, it still generates only 10% of the company's revenue, the business can offset a portion of the top and bottom line declines caused by the weakness in TSLA's automotive business.
Finally, Tesla should be able to provide its FSD products and other services to other automakers.
While we acknowledge the potential of TSLA, our belief lies in the belief that AI stocks have greater hope to provide higher returns and do so in a shorter time frame. AI stocks have risen since the beginning of 2025, while popular AI stocks have lost about 25%. If you are looking for AI stocks that are more promising than TSLA but have less than 5 times its earnings, check out our report Cheapest AI stocks.
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Disclosure: None. This article was originally published in Insider Monkey.
