Is Tesla Stock Under $360 a Share an Obvious Buy in September?

Tesla (NASDAQ: TSLA) is well off a 52-week high that approached $500 per share. At its current price of around $360, the stock is also comfortably below the average analyst price target for the electric vehicle (EV) manufacturer. Yet just because Tesla appears undervalued to the analysts, does that make it an obvious buy?

Tesla's financials paint a mixed, but interesting, picture. Elon Musk's company posted a record second quarter of EV deliveries, and total revenue jumped 26% year over year to $28.2 billion. All that would appear to be great news, until you look at the company's profitability. Free cash flow turned negative as capital spending soared. Margins are under pressure as Tesla is on course to invest up to $25 billion this year in its new Cybercabs, AI initiatives, and robotics.

To me, this is more of a story of short-term pressure than longer-term concerns. The investments Tesla is making today are somewhat speculative, and there are real execution risks to consider, but for investors with long time horizons, the payoff could be enormous. I'm particularly optimistic about Tesla's energy storage capabilities, which are becoming increasingly important as the AI boom continues.

Tesla still trades at an incredibly lofty valuation, with its forward and trailing P/E ratios at about 150 and 330, respectively, and a market cap of roughly $1.4 trillion. However, for the most bullish investors, the stock looks compelling at less than $400 per share.

I wouldn't say it's an obvious buy because of how risky Tesla's endeavors tend to be. Still, if you have an elevated risk tolerance and at least half a decade's worth of patience to hold on to your investment, shares priced below $400 could arguably be considered reasonable.

Catie Hogan 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.