Relatively speaking, Tesla is far less overvalued than in the past.
At one point their market cap exceeded every other automaker in the world COMBINED.
That might make sense if they were making unprecedented loads of money but of course they got trounced in sales compared to Toyota then and now.
Yes, it was at something like 30x overvalued, now it’s only 20x overvalued.
Glad you mentioned Toyota. Their P/E ratio is approximately 7. Tesla is approximately 100. If Tesla were a well run car company with a lot of good vehicles and an anonymous CEO who nobody hates, the fair value of their stock would be about $14 per share. It’s currently $236 per share.
Someone is going to make mountains of money shorting Tesla stock, but unfortunately it’s going to be someone rich. The market can remain irrational much longer than normal people can remain solvent. Some rich dude is going to take the risk though and make out like a bandit.
NOOOOO don’t look at P/E ratios (the auto sector has always had extraordinarily low P/E ratios) you have to look at relative PEG ratios!
At least that was the copium years ago. Now that their sales growth has petered out globally (even before all of the President Musk backlash) and China has free-money’d their way to a technological advantage for EVs I don’t even understand it anymore. The other automakers are either caught up or rapidly approaching and the thing I’ve been saying for years (PHEVs are superior to BEVs for most people) is being proven true.
Before I called it hysteria and FOMO and blind optimism but now I just don’t get it.
