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Is Tesla overvalued or is its share price of nearly $700 justified? The company’s evaluation is around a whopping $660 billion. Tesla is one of the most traded stocks in the market, it’s one of the most expensive by many measures. This stat brings us to the motive of this article. Is Tesla overpriced? Noted trade analyst Craig Irwin has commented that Tesla’s stock is overvalued and is worth only $150.
Tesla Market Cap and Net worth
Tesla is the most valuable carmaker by a wide margin. Tesla’s stock price times shares outstanding (market capitalization) of $629 billion which is sixth among all of the companies in the U.S. stock market. The electric carmaker is worth almost 8 times General Motors and nearly 13 times Ford.
General Motors and Ford have a debt of $100 million each which is the reason Market Cap understates the true value of GM and F. Whereas Tesla has a cleaner balance sheet as it carries $13 billion of debt. To judge precisely we use Enterprise Value and by that measure, Tesla is worth roughly 4 times General Motors and Ford Motor.
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Tesla Price and Earnings Ratio
To simply put it, a company’s per-share earnings divided by its stock price. Tesla is conclusively more expensive. Price/sales or price/revenue is yet another valuation metric. Tesla trades the eighth-highest ratio for all members of the S&P 500 index.
Tesla trades more than 1,000 times historic earnings, and 161 times estimated future earnings, to put this into perspective it’s more than 10 times the related numbers for its gasoline-powered rivals. Compared to GM and F’s trade for less than 1-time revenue, Tesla trades for 23 times sales.
The prices for few models,
1. Model 3 – Standard Range – $35,000
2. Model S – Plaid -$131,100
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3. Model X – Long Range – $89,500
You all might be wondering why we gave you prices of the cars, it’s a mere sample for you to understand the fact, that Tesla has only 130 physical stores in the US. Despite that Tesla has reported that it delivered 184,800 vehicles and produced 180,338 cars in the first quarter of 2021. Model 3 sedans and Model Y crossover SUVs were the most produced ones and there was no production of its more expensive Model S sedans and Model X SUVs. The distribution of high-priced S/Xs plummeted from 18,920 to 2,020 during this period.
The electric-car maker increased the sales by 45 percent last year.
Is Tesla Overvalued?
In the face of high-growth potential, it is hard to see Tesla justifying the high stock price. Then there arises the question of Tesla will continue growing quickly when competition increases. We have broken it down for you, you decide for yourselves of Tesla is overvalued or not. If you liked this article (or if it helped at all), please leave us a comment below or share it with friends, so they can understand Tesla’s share value too.
