Looking at the latest buying activity from Hargreaves Lansdown investors, Tesla (NASDAQ:TSLA) is once again one of the most popular shares on the platform. Despite its recent tumble, the company has been a stellar performer over the years, making it one of few popular stocks to actually deliver impressive returns.
Let’s take a closer look at how Tesla shares have performed over the last half-decade. And explore whether I should be considering this business for my portfolio today.
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The performance of Tesla shares
In May 2017, this growth stock was trading at around $68.2 per share. Today, even after crashing by over 40% since the start of 2022, Tesla shares are priced at just under $710. That’s a 941% return in just five years, which translates into an annual average return of 56.6%!
To put that in perspective, if I’d invested £1,000 ($1,240) into Tesla shares back in 2017, my position would currently be worth £10,410 ($12,864).
The question now is, will the business be able to replicate this performance over the next five years? Given the company’s size today, I think it’s unlikely to see another 10x return by 2027. But in the long term, I feel it’s certainly possible, albeit not risk-free.
With that in mind, is the latest price crash an opportunity to add some Tesla shares to my portfolio at a discount?
Taking a closer look
Despite the direction of its shares, Tesla continues to achieve solid performance. Vehicle deliveries in the first quarter of 2022 reached 310,048. By comparison, this figure stood at 184,800 just a year ago.
The growth has been driven by a combination of production ramp-up as well as a rising demand for its electric vehicles (EVs). And that’s even with supply chain disruptions and surging car prices due to inflation.
Unsurprisingly, the revenue stream during the three month period grew by similar proportions coming in at $18.76bn versus $10.39bn a year ago. And by exercising its pricing power to offset the increased costs, profit margins have expanded by nearly 15%, sending earnings to $3.3bn versus $438m in 2021.
Looking at these figures, I think it’s fair to say Telsa is smashing it. But whether this can continue moving forward is far from guaranteed. With automotive industry titans now electrifying their fleets, the competitive arena is starting to heat up quickly. And it remains to be seen if Tesla can hold its ground as other companies introduce their own EVs.
Time to buy?
All things considered, I continue to admire this business even with a wildcard CEO like Elon Musk. But I remain cautious about the valuation. With such high expectations of continued future performance, the slightest wobble in growth could be enough to send Tesla shares further down the spiral. Therefore, I’m personally keeping this business on my watchlist for now.
