At Tesla’s annual meeting on Aug. 4, shareholders approved a 3-for-1 stock split. Even though stock splits do not impact the market value of a company, they are typically viewed favorably since a lower per-share price may attract more retail investors.

Tesla’s share price would convert to roughly $291 if the stock split took place at the time of this writing. Individual investors may find this more appealing than $864. Despite lower stock prices, stock splits increase the number of outstanding shares proportionately, so the value of a company remains unchanged.

Is it a big deal?

In the U.S., the company commands 61% of the battery electric vehicle (BEV) market and 26% of the global market. Unlike many companies that are now scrambling to ramp up investments in the electric vehicle space, Tesla has been around for quite some time.

Tesla’s adjusted earnings per share rose 56.6% to $2.27 in its second quarter, as sales soared 41.6% to $16.9 billion. However, Tesla still managed a very respectable performance despite factory shutdowns related to COVID-19 and limited supply chain access.

On a year-by-year basis, production and deliveries grew by 25.3% and 26.5%, respectively, bringing Tesla’s total deliveries over the past year to 1.1 million. Despite passing headwinds, the company still expects to grow vehicle deliveries by 50% on average annually over the next few years.

Thanks to its ample funding, the electric car maker is more than capable of doing so. Over the past 12 months, it has generated $7 billion in free cash flow (FCF) and $18.3 billion in cash and cash equivalents.

According to Wall Street, Tesla’s total revenue will increase 57.5% year over year to $84.8 billion, and its adjusted earnings per share will rise 83.8% to $12.46 per share.

Is it enough to buy?

Considering recent macro conditions such as record-high inflation, off-the-charts input costs, and unprecedented supply chain bottlenecks, those are steadfast growth rates. The business of Tesla CEO Elon Musk has always been resilient, and I expect it will continue to be so. Considering the stock is down 28.3% year to date, prudent investors may want to take a closer look.

Stock splits should never be used as an excuse to buy company shares; investors should focus on the company’s underlying fundamentals instead.

According to Valuates Reports research, Tesla is the apparent king of the global EV market, which is projected to grow at a compound annual growth rate (CAGR) of 18.2% through 2030.