Tesla Stock Looks Expensive

last updated on

Tesla Stock Looks Expensive

Tesla (Tsla) Stock Looks Expensive

Tesla (TSLA) is one of those stocks that have always looked expensive based on all the valuation metrics. But despite this, the stock has managed to hit new highs again and again!

That's why the Tesla (TSLA) stock has gained almost 33% in the last year alone. So, it seems that the investors of Tesla (TSLA) don't care that much about the traditional valuation metrics.

Tesla (Tsla) Stock Price Up By 223%

In the last 5 years, the share price of Tesla (TSLA) has been up by 223% which is a record in itself. But despite such a performance, some analysts believe that Tesla (TSLA) shares are overpriced.

The main business of Tesla (TSLA) is electric cars, but many new players have now joined the EV space. So, the company is now facing more competition and shrinking profit margins.

In addition, Tesla has faced many problems this year, and the biggest one of them is shrinking sales volume. Of course, the political preference of Elon Musk had a big role in that. However, another factor at play is higher competition around the world.

Also, the US government is planning to end the tax credits, which will also impact the bottom line of Tesla (TSLA).

Other businesses of Tesla (TSLA) are the storage business and power generation. Once again, these sectors are known for tough competition and not-so-great profit margins.

So, even if we combine all the businesses of Tesla (TSLA), it's still hard to justify a market cap of $966 billion.

The bottom line is that Tesla (TSLA) is involved in many great businesses. But it still doesn't mean that we can justify such a massive market cap.

At the same time, we also can't underestimate the power of the Tesla (TSLA) investors. After all, they have continued to buy Tesla (TSLA) shares over the years despite the lacking fundamentals.

Trending Stories