Is Tesla, Inc. overvalued or undervalued?

Jun 25 2025 08:31 AM IST
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As of January 29, 2025, Tesla, Inc. is considered overvalued with a very high P/E ratio of 135 and premium EV metrics compared to peers like General Motors and Ford, despite recent strong performance.
As of 29 January 2025, Tesla, Inc. has moved from an expensive to a very expensive valuation grade. The company is currently overvalued, with a P/E ratio of 135, significantly higher than its peers, such as General Motors Co. at 7.62 and Ford Motor Co. at 8.68. Additionally, Tesla's EV to EBITDA stands at 72.73, while General Motors and Ford report much lower figures of 4.74 and 16.63, respectively. The EV to Sales ratio for Tesla is 9.61, indicating a premium compared to the automotive industry.

Tesla's financial metrics, including a ROCE of 15.60% and a ROE of 9.40%, suggest some operational efficiency, but these ratios do not justify its high valuation relative to peers. While Tesla has outperformed the S&P 500 over the past year with a return of 90.53% compared to 10.26%, this strong performance may not be sustainable given the current valuation metrics. Overall, Tesla appears to be overvalued in the current market environment.
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