Elon Musk says Tesla will be worth more than Apple and Saudi Aramco combined.

The potential for Tesla to buyback stock for the first time has gained steam in recent weeks. Is it one of his ploys.

CEO Elon Musk said last month that Tesla was considering a share buyback of $5 billion to $10 billion. Does he believe the stock is undervalued?

Is Tesla Stock a Buy?

Shares are down but revenue is soaring.

The electric-car maker's stock has been pummeled this year, falling more than 40%.

Despite a challenging macroeconomic environment, Tesla's deliveries jumped 42% year over year in Q3.

Management expects more strong growth in Q4.

Over the last three months, Tesla (NASDAQ: TSLA) shares have lost about a third of their value. Year to date, they are down more than 40%. The pullback in the stock price likely has a lot of investors wondering if now is a good time to buy the electric-car maker's stock. After all, even though shares are down the underlying business is growing rapidly. Perhaps Tesla's fundamentals have caught up with its stock price recently.

The world may be facing intense macroeconomic certainty but you wouldn't know it by looking at Tesla's recent business results. Third-quarter revenue soared 56% year over year and free cash flow for the period increased 148% to about $3.3 billion. Further, the company's cash position grew to $21.1 billion.

Q3 was outstanding. Record revenue. Record operating profit. Record free cash flow.

The strong quarter, of course, was fueled by Tesla's surging vehicle deliveries. Total third-quarter deliveries increased 42% year over year to 343,830.

More strong growth is expected

If you're thinking the quarter was a fluke, think again. The company's execution is solid even when you zoom out. Tesla expects full-year production to grow 50% versus 2021. Growth in deliveries is expected to be "just under 50%" said Tesla chief financial officer Zachary Kirkhorn in the company's third-quarter earnings call.

Regarding the fourth quarter specifically, Tesla CEO Elon Musk insinuated during the call that vehicle order levels remain strong. "I can't emphasize enough, we have excellent demand for Q4, and we expect to sell every car that we make for as far in the future as we can see," Musk explained. "So, the factories are running at full speed..."

Buy, sell, or hold?

Clearly, things are going well for Tesla -- especially relative to the rest of the auto industry. A report by auto dealer marketing and operations software company Cox Automotive forecasts that U.S. auto sales will fall about 9% this year. Global trends are largely expected to be just as bad if not worse.

Tesla's strong business performance during a challenging environment highlights the automaker's momentum and the powerful secular demand tailwinds for fully electric vehicles. All of this to say, the stock's decline marks a good time to consider the stock. Sure, Tesla's price-to-earnings ratio of about 61 at the time of this writing may seem pricey at first glance. But when investors consider the company's strong momentum and management's optimistic outlook, the valuation starts to look more attractive.