275 times earnings! Am I the only person who thinks Tesla’s stock price is over-inflated?
During the six months to 22 December, the Tesla (NASDAQ:TSLA) stock price has risen by approximately 50%. Yet all of the metrics I use to assess the group’s stock market valuation indicate that its shares are hugely expensive. However, as this recent rally demonstrates, many people still see some value in the electric car maker.
Clearly, I’m missing something. What could it be?
Over the four quarters to 30 September, Tesla reported earnings per share (EPS) of $1.77. This means its stock is currently trading on 275 times historic earnings. But this figure has been adjusted for the loss made on cryptocurrency. Include this and the reported EPS drops to $1.44 and the price-to-earnings (P/E) ratio…
