Down by 22% in little over a week, Tesla (NASDAQ:TSLA) sometimes seems to be behaving more like a penny share than a company worth almost $900bn that last year had a revenue close to $100bn. Still, I have been eyeing Tesla stock as a possible addition to my portfolio for a while already – so could this latest crash offer me the sort of buying opportunity I have been hoping for?

What I like about Tesla

My answer depends on the price, something I will get into below. First, though, I ought to explain why I like the idea of owning some Tesla stock at all.

The company is barely more than two decades old. But it has already built up a massive global manufacturing and sales footprint for its electric vehicles. Sales volumes declined slightly last year (and that decline has accelerated this year), but remain substantial.

I think Tesla’s recent history points to two important factors.

First, it is a serious contender in the electric vehicle space. That is a competitive area and Tesla risks rivals like BYD leaving it behind, but it has strengths such as proprietary technology, a vertically integrated business model and unique designs.

A second point also jumps out at me from Tesla’s development. It has demonstrated expertise not only in imagining new products, but in bringing them to market at scale and quickly. It is doing the same now with its power storage division, which, unlike the car business, had a very strong first quarter.

Such expertise could help Tesla capitalize on some of the other ideas that sit somewhere between its drawing board and widespread real world use, from automated taxi fleets to robotics.

The Tesla share price is not so likeable!

That matters because, seen purely as a car company, Tesla stock would look wildly overvalued to me.

As far as I am concerned, the only possible justification for the current valuation, let alone a higher one, is the potential of the company’s plans beyond the electric car business.

That, however, is where I start to have serious concerns about valuation, even after the recent crash in Tesla stock.

While the power storage business is growing quickly, even taken together with the car business I do not think the joint valuation ought to be anywhere close to $900bn.

Meanwhile, the other ideas are highly speculative for now – it remains to be seen when they are commercialized at scale, if they ever are. So I think it is hard to justify anything more than a fairly modest valuation for them at this point, no matter how large the long-term potential may seem to be.

Taken as the sum of the parts, I do not think Tesla is worth anything like its market capitalization. So, although the share is cheaper than a couple of weeks back, it is still far too expensive for me to consider buying yet.