Tesla is one of the most exciting stocks out there. Some people see it as a huge success story, while others think it’s just an expensive car company. But one thing is clear: Tesla’s stock has had a wild and dramatic journey. I’d personally love to own Tesla shares but only at the right price. The company has a powerful brand, a loyal customer base, and a history of rapid innovation. Before we talk about what’s next, let’s take a step back and see how things have gone so far.

544% Growth: The Numbers Speak for Themselves

Here’s a key fact:  Tesla doesn’t pay dividends. So, if someone had invested £150 in Tesla five years ago, they wouldn’t have earned any regular income. But they likely wouldn’t have cared because the value of that investment rose by 544%. That means £150 invested back then would now be worth £966. No, it won’t get you a private jet or luxury yacht. But turning £150 into nearly four figures in five years? That’s impressive by any standard.

Outperforming the S&P 500 (and FTSE 100)

To understand just how big this return is, consider this: the S&P 500 index rose 94% during the same period. That’s already more than double what the FTSE 100 managed. Even so, Tesla leaves both far behind. It’s a reminder of just how explosive individual stock performance can be compared to indexes.

The Investor Trap: Thinking the Past Predicts the Future

Things have been amazing so far but here’s where many investors make a mistake (including myself): they assume past success will continue into the future. But that’s not always the case. In fact, Tesla stock has been highly volatile recently. Over the past year, it doubled in value. But since December, it has dropped by around 25%.

Why I’m Not Buying Tesla Right Now

The factors that drove Tesla’s growth in the past five years may not apply anymore. Last year, Tesla’s sales fell slightly, and that decline accelerated in the first quarter of this year. The EV (electric vehicle) market is still growing, but competition is getting tougher. And that can hurt profit margins.

Big Ideas, But Not Yet Big Profits

Tesla is betting big on exciting new tech: driverless taxis, robotics, and more. These could be game-changers. But so far, only the power storage division has shown strong commercial success at scale. Until those other projects start generating real returns, I remain cautious.

A “Ludicrously High” Valuation

Then there’s the matter of price. Tesla’s price-to-earnings (P/E) ratio is 197, which I believe is “ludicrously high.” For now, that makes Tesla too expensive for me to invest in.

Great Story, But Timing Is Everything

There’s no doubt Tesla has had an incredible run and the future may still be bold and bright. But when it comes to investing, timing is everything. Right now, I’ll watch from the sidelines.