It's been a strong start to the year for the stock market. The so-called "Magnificent Seven" stocks are driving gains, but one industry-leading enterprise and member of this group stands out as a poor performer.

As of March 6, Tesla (TSLA -1.11%) stock was down 29% in 2024. And since its all-time high, set in November 2021, shares of the electric vehicle (EV) business had fallen a notable 57%.

Should investors be opportunistic, take advantage of the sizable dip, and buy Tesla stock right now? Let's take a look.

2023 was tough

From 2017 and 2022, Tesla's revenue increased at a compound annual growth rate of 47%. This type of monster growth helps explain why the stock was a massive winner for investors, trading more like a tech company and jumping 500% from the end of 2017 to the end of 2022.

Even better, Tesla went from a net loss of $2 billion in 2017 to an impressive net income of almost $13 billion in 2022. The business proved it could scale up its manufacturing capabilities, driving down production costs in the process, which resulted in positive earnings.

As macroeconomic and industry headwinds rattled the car market in 2023, Tesla revealed its true colors. Despite all that the company had accomplished, basically helping to create the EV industry as we know it today, the business looks more and more like a traditional automaker.

In the last three months of 2023, sales were up just 3%, a significant slowdown from what shareholders have grown accustomed to. Even worse, ongoing price cuts shrank the gross margin from 23.8% in the fourth quarter of 2022 to 17.6% in the fourth quarter of 2023. These are not encouraging trends.

Given that the U.S. hasn't seen interest rates this high since 2007, this is a new situation for Tesla.  Should rates stay higher for longer, it could lead to lower growth prospects for the company.

Last year showed that Tesla can't escape the realities of being an automaker. To succeed, its operations depend on many external factors going right, like lower interest rates, improved unemployment, and boosted consumer confidence. What's more, competition is set to intensify in the years ahead, which will pressure margins.

Still a story stock

Even though Tesla's shares are well off their peak price, they still look expensive, trading at a forward price-to-earnings ratio of 55. This still looks like a "story stock," with bullish investors hoping for game-changing progress in the decade ahead and betting on the stock based on its story rather than its fundamentals.

One of these biggest hopes is for Tesla to introduce full self-driving (FSD) capabilities, where the driver doesn't need to be involved in the operation of the vehicle. However, investors should temper expectations as to when this will become a functioning technology, given that founder and CEO Elon Musk has over-promised and under-delivered in the past as to the timeline of fully autonomous driving software.

Musk thinks that when FSD becomes a reality, Tesla will experience "quasi-infinite demand" for a global robotaxi service. And the thinking is that this will lead to outsize profitability. There's also the belief that Tesla will one day start selling its humanoid robot, Optimus, to other businesses in large quantities, creating another major revenue driver.

The stock's steep valuation likely prices in a virtual certainty of these long-term goals. Of course, it's been a losing proposition to bet against Musk, one of the greatest visionaries ever, but investors should look at the facts in front of them and not be overly swayed by lofty ambitions whose ultimate outcomes are still surrounded by lots of uncertainty. I don't think Tesla makes for a smart buy right now.