Despite its rather impressive performance for most of the year, Tesla (TSLA) has fallen for the third straight day, leading many to ponder if the stock is still a buy for 2025. Indeed, the automobile manufacturer is set to end the year down after a surging November.
The stock’s performance will always be tied to CEO Elon Musk. Over the last several months, the entrepreneur has become an ever-growing voice within the incoming Donald Trump administration. As head of Trump’s DOGE commission, there are many who believe his attempts at both roles have hindered the electric vehicle manufacture.
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Tesla Keeps Falling: Is Stock Still Set to Thrive in 2025?
It has certainly been a dominant year for Tesla. In October, the company announced its highly anticipated Robotaxi. The vehicle is one of the most promising forays into autonomous automobile manufacturing and has provided the company with yet another leg up.
With Musk maintaining a position within Donald Trump’s incoming administration, there are hopes that regulation will eventually favor the company’s creations. However, shares have continued to fall for the firm. With Tesla dropping for the third consecutive day, there are those who wonder if the TSLA stock is still a buy entering 2025.
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Tesla shares are up a remarkable 70% this year, far surpassing the S&P 500 and its 25% jump. Moreover, the company has finally rid itself of its overspending label. Free cash flow hit above the $2.7 billion mark in the most recent quarter. That marks an increase of more than 233% in a starting shift for the firm.
However, skepticism abounds. Currently, the stock trades at a price-to-earnings ratio of 118. That makes the company a risk, as there is almost no room for it to be wrong. Any setback, whether geopolitical, economic, or otherwise, could devastate the stock.
This has combined with lower automobile sales with high interest rates hindering consumers. That is concerning considering Tesla’s primary business remains automobiles. Making up 79% of sales, there is no doubt that the company will still rely on them. All that said, a pullback in 2025 could present a clear buying opportunity. Until then, investors are smart to steer clear at its current level.
