Tesla Inc (TSLA) receives a weak valuation ranking of 4 from InvestorsObserver's data analysis. The proprietary ranking system focuses on the underlying health of a company through analysis of its stock price, earnings, and growth rate. TSLA has a better value than 4% of stocks based on these valuation analytics. Investors primarily focused on buy-and-hold strategies will find the valuation ranking relevant to their goals when making investment decisions.
Metrics Analysis
TSLA's trailing-12-month Price to Earnings (PE) ratio of 757.9 puts it above the historical average of roughly 15. TSLA is a poor value at its current trading price as investors are paying more than what its worth in relation to the company's earnings. TSLA's trailing-12-month earnings per share (EPS) of 0.51 does not justify what it is currently trading at in the market. Trailing PE ratios, however, do not factor in a company's projected growth rate, resulting in some firms having high PE ratios due to high growth potentially enticing investors even if current earnings are low.
TSLA currently has a 12-month-forward-PE-to-Growth (PEG) ratio of 12.12. The market is currently overvaluing TSLA in relation to its projected growth due to the PEG ratio being above the fair market value of 1. TSLA's PEG comes from its forward price to earnings ratio being divided by its growth rate. Because PEG ratios include more fundamentals of a company's overall health with additional focus on the future, they are one of the most used valuation metrics by analysts.
Summary
TSLA' has a weak valuation at its current share price on account of a overvalued PEG ratio despite strong growth. TSLA's PE and PEG are worse than the market average leading to a below average valuation score.
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