Shareholders of the electric vehicle (EV) mogul Tesla (TSLA 5.34%) approved a 3-for-1 stock split at its annual meeting on Aug. 4. Although stock splits don't impact the market value of a company, they are typically looked at favorably in that a lower per-share price may open the gate for a new wave of retail investors.

For instance, if the stock split were to occur at the time of this writing, Tesla's share price would convert to roughly $291, which may be more enticing to individual investors than the $864 it currently trades at. Stock splits work without changing the value of a company because while the stock price goes down, the number of outstanding shares increases proportionately. So, in light of the recent news, should investors consider buying a stake in Tesla today?

Close-up of a person charging a yellow electric vehicle.

Image source: Getty Images.

Assessing the fundamentals

Enough about stock splits -- let's dive into Tesla's financial condition. At the moment, the company commands 61% of the U.S. battery electric vehicle (BEV) market and 26% of the global industry. Whereas many companies are now scrambling to ramp up investments in the EV space, Tesla has been around, and the numbers show that. In its second quarter, the EV leader's total revenue surged 41.6%, up to $16.9 billion, and its adjusted earnings per share soared 56.6% to $2.27. And while COVID-19-related factory shutdowns and supply chain limitations halted production and deliveries compared to the last quarter, Tesla still managed to put together a very respectable outing.

Production and deliveries climbed 25.3% and 26.5% on a year-over-year basis, up to 258,580 and 254,695, bringing Tesla's total deliveries over the past 12 months to 1.1 million. Despite passing headwinds, the company still predicts it will achieve a 50% average annualized growth in vehicle deliveries over a multi-year time horizon. Fortunately for the electric car maker, it has more than enough funding to do so. As of Q2, it boasts a cash and cash equivalents position of $18.3 billion, and the company has generated $7 billion in free cash flow (FCF) in the past 12 months.

For the full year, Wall Street expects Tesla's total revenue to increase 57.5% year over year to $84.8 billion and its adjusted earnings per share to rise 83.8% to $12.46. Those are steadfast growth rates, especially when you keep in mind the latest macro conditions like record-high inflation, off-the-charts input costs, and unprecedented supply chain bottlenecks. CEO Elon Musk's business is resilient -- it always has been, and if I had to guess, it will continue to be. And considering that the stock is down 28.3% year to date, I believe it's time for prudent investors to give it a fine look.  

Should investors go shopping for Tesla stock?

Investors should never buy shares of a company because of a stock split; rather, they should turn their attention to the underlying fundamentals of the business. In Tesla's case, the Musk-led company is the apparent king of the global EV market, an industry that is forecast to rise at a compound annual growth rate (CAGR) of 18.2% through 2030, according to research from Valuates Reports.

The EV revolution is in full motion, and given Tesla's strong financial performance up to this point, I feel confident chalking the company up as a surefire winner in the space. Short-term headwinds may serve as a setback for now, but over the long run, this is a stock that all EV investors should have in their portfolios.