I’m Trying My Hardest to Justify Tesla Stock’s Valuation

Tesla Stock Price Doesn’t Make Sense

Tesla’s stock is flying high, but its valuation doesn’t make sense. The company is worth more than the world’s top 10 automakers combined, despite producing fewer than a quarter of the cars. Tesla’s market cap is now over $1 trillion, making it one of the world’s most valuable companies. But is it really worth that much?

EPS Today Does Not Justify Market Cap

Tesla’s earnings per share (EPS) are expected to be $9 in 2023. At its current market cap of $1 trillion, this gives Tesla a price-to-earnings ratio (P/E) of 111. That’s a very high P/E ratio, especially for a company that is still growing rapidly. For comparison, the average P/E ratio for the S&P 500 is around 18.

Tesla’s Growth Prospects Are Impressive

Tesla’s growth prospects are impressive. The company is expanding its production capacity rapidly, and it is entering new markets. Tesla is also investing heavily in new technologies, such as autonomous driving and battery storage. These investments could pay off in the long run, but they are also a risk.

Is a Valuation Based on Future Promise or Current Reality?

Tesla’s valuation is based on its future promise, not its current reality. The company is still losing money, and it is facing increasing competition from established automakers. Tesla also has a long history of production delays and quality issues.

Tesla’s valuation is a bet on the future

Tesla’s valuation is a bet on the future. If the company can execute on its plans, it could become one of the most valuable companies in the world. However, there are also significant risks involved in investing in Tesla. The company is still facing many challenges, and its valuation could come crashing down if it fails to meet expectations.

Conclusion: I’m Trying My Hardest to Justify Tesla Stock’s Valuation

I’m trying my hardest to justify Tesla’s stock valuation, but I’m struggling. The company’s valuation is based on its future promise, but there are significant risks involved. Tesla is still facing many challenges, and its valuation could come crashing down if it fails to meet expectations. I believe that Tesla is a great company with a lot of potential, but I’m not sure if its stock is worth $1 trillion.