Is Tesla Stock a Buy Before April 22?

Tesla (NASDAQ: TSLA) has a big date coming up. The electric vehicle (EV), energy storage, robotics, and artificial intelligence company will release its first-quarter 2025 earnings report after the market closes on April 22. This is always a noteworthy event, a chance for investors to check a company's pulse.

However, this could be one of Tesla's most significant earnings events in years. It will give investors an updated look at how CEO Elon Musk's political efforts might have affected the brand.

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And investors are eagerly awaiting updates on the company's looming Robotaxi service, which is supposed to be just months away.

Should investors buy the stock before the earnings release on April 22? Here is what you need to know.

Tesla's disappointing Q1 delivery numbers could have multiple causes

Despite ambitions in robotics and self-driving technology, selling EVs still pays the bills. The company recently announced it delivered 336,681 vehicles in the first quarter. That number badly missed the market's expectations of 360,000 to 370,000 and represents a 13% decline from a year ago.

Musk's commentary on the delivery figure will be among the top storylines of the earnings call. He has dived head-first into U.S. politics with his efforts to rein in government spending with the Department of Government Efficiency.

Politics are divisive, and his efforts have sparked protests and vandalism against his cars and dealerships. Early research indicates that the brand has taken hits in markets like Europe and Canada.

However, the economy could also be involved. Consumers are struggling in the U.S. right now. Auto loan delinquencies have skyrocketed, and consumer sentiment has plummeted since the start of the year. This is not conducive to people buying new vehicles.

Politics seem to have affected Tesla's sales at this point, at least somewhat, but the soft first-quarter deliveries are probably not entirely politically driven, as they seem at first glance.

The stock has declined nearly 50%

Bad publicity and increased market volatility tend to hurt stock prices. Tesla peaked following the election in late 2024 but has declined nearly 50% over the past several months.

Frankly, this drop could benefit long-term investors. As stomach-churning as steep price declines are, I sounded the alarm on Tesla's valuation months ago. That's not to brag, but to reference the valuation getting too far away from other automakers.

The company is still overwhelmingly an auto business, so it's hard to justify such dramatic departures from a peer like Toyota Motor:

TSLA EV-to-Revenue data by YCharts; EV = enterprise value.

Admittedly, it's probably fair for Tesla to trade at a higher valuation than traditional automakers due to its exciting potential with its Robotaxi and Optimus humanoid robots on the horizon. However, they aren't here yet. The lower the valuation that investors pay, the more likely these potential catalysts will produce positive outcomes for them.

The good news is that its enterprise value is now at a single-digit multiple on its revenue. Unfortunately, it could easily go lower from here, and its EV business is headed in the wrong direction, at least for this quarter.

On the fourth-quarter earnings call, Musk said that the company is between growth phases as it ramps up production of the new Model Y, potentially launches a more affordable model this year, debuts its Robotaxi service, and prepares to manufacture Optimus robots and Cybercabs.

Here is what investors should do heading into Q1 earnings on April 22

Given how much commotion there is with Tesla, internally and externally, there is more uncertainty surrounding an already polarizing company and stock.

Steep declines like it is experiencing can be buying opportunities for long-term investors. Still, it's probably wise to let the dust settle.

The core business appears to be struggling, and launching its Robotaxi service in a limited fashion later this year won't change that. The stock is arguably still expensive, so it could easily slide further if the market remains shaky.

Investors should consider holding off for now. See what Tesla's first-quarter earnings report has to say and what Elon Musk says about the state of things on the earnings call. Then, after digesting everything, formulate a plan to accumulate shares slowly if you believe the company is on the right track. It's OK to move slowly and methodically.

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Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.