Tesla Inc (TSLA) receives a weak valuation score of 7 from InvestorsObserver's analysis. Our proprietary scoring system considers the overall health of the company by looking at the stock's price, earnings, and growth rate to determine if it represents a good value. TSLA holds a better value than 7% of stocks at its current price. Investors who are focused on long-term growth through buy-and-hold investing will find the Valuation Rank especially relevant when allocating their assets.
Metrics Analysis
TSLA has a trailing twelve month Price to Earnings (PE) ratio of 670.9 which places it above the histroical average of roughly 15. TSLA is currently trading at a poor value due to investors paying more than what the stock is worth in relation to its earnings. TSLA's trailing-12-month earnings per share (EPS) of 1.00 does not justify its share price in the market. Trailing PE ratios do not factor in the company's projected growth rate, thus, some firms will have high PE ratios caused by high growth recruiting more investors even if the underlying company has produced low earnings so far.
TSLA has a 12 month forward PE to Growth (PEG) ratio of 6.9. Markets are undervaluing TSLA in relation to its projected growth as its PEG ratio is currently below the fair market value of 1. 1's PEG comes from its forward price to earnings ratio being divided by its growth rate. PEG ratios are one of the most used valuation metrics due to its incorporation of more company fundamentals metrics and a focus on the firm's future rather than its past.
Summary
All together these valuation metrics paint a pretty poor picture for TSLA at its current price due to a overvalued PEG ratio despite strong growth. The PE and PEG for TSLA are worse than the average of the market resulting in a valuation score of 7.
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