Tesla (TSLA) “has the best per-unit profit margin in the automotive business, and its business model is still profitable,” Brian Mulberry, Zacks Investment Management’s Client Portfolio Manager told Schwab Network recently.
What’s more, Tesla can monetize its Full Self Driving offering, and its Power unit can offset some of the contraction of its auto business, Mulberry stated.
At this point, the valuation of TSLA stock has dropped enough to make the shares worth buying, Mulberry asserted.
Tesla’s Positive Catalysts
Tesla’s per-unit margins remain higher than those of any of its competitors, and its earnings are still growing at an 18% to 20% annual clip, Mulberry said.
And although the firm’s Power unit, which grew 180% over the past three years, still only generates around 10% of the firm’s revenue, the business can offset part of the top-and-bottom-line declines caused by the weakness of TSLA’s auto business, according to Mulberry.
Finally, Tesla should be able to license its FSD offering and other services that it provides to other automakers, the stock picker believes.
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This article is originally published at Insider Monkey.
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