Should You Buy the Dip in Tesla With These ETFs?
Zacks Investment Research | Nov 09, 2021 11:10PM ET
Tesla Motors (NASDAQ:TSLA) 6 ETFs to Ride on Tesla's Trillion-Dollar Market Cap ).
The rally came on the back of strong Q3 earnings and delivery numbers. Tesla posted record Q3 revenues and one of the strongest profit margins in the group's history. It also delivered record vehicles in the last quarter, underscoring its strong growth amid the global automotive semiconductor shortage that is roiling car production across the globe. The company's Model 3 has become the first electric vehicle to top monthly sales of new cars in Europe, beating stalwarts like the Renault (PA:RENA) Clio and Volkswagen (DE:VOWG_p) Golf.
That said, the outlook for the electric vehicle maker remains solid. The stock also saw a solid earnings estimate revision of 59 cents over the past 30 days for this year with estimated growth of 163.8%. Tesla currently has a Zacks Rank #1 (Strong Buy) and a Growth Score of A, underscoring that it is primed for more growth.
However, Tesla is still overvalued after the latest slide. It has P/E ratio of 196.74 compared to the industry average of 19.83, which suggests that the stock might continue to see rough trading ahead, thereby making the ETFs unattractive. But investors should note that the ETFs provide spread out exposure to a number of firms, suggesting that these can easily counter shocks from some of the industry’s biggest components.
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