TSLA is now overvalued and could go down -42%

Based on our analysis, Tesla has received an overvalued rating of 1 out of 5 stars from Cashu, primarily due to its financial ratios that significantly exceed industry averages. The Price-to-Earnings (PE) Ratio for Tesla stands at 160.45, compared to the sector average of 15.61. A high PE ratio can indicate that a company’s stock is overvalued relative to its earnings, suggesting that investors are paying a premium for future growth expectations that may not materialize. In addition, Tesla's Price-to-Book (PB) Ratio is 17.78, while the sector average is only 1.97. This ratio reflects the market's valuation of the company's assets. A high PB ratio may signal overvaluation, as investors might be paying much more than the company's actual book value for its equity. Although Tesla's Net Profit Margin of 7.30 is significantly higher than the sector's 0.09, this metric alone does not justify the high valuation metrics. The return on equity (ROE) for Tesla is 9.78, compared to the sector's 1.09, indicating effective management of shareholder equity. However, these profitability measures do not mitigate the concerns raised by the elevated PE and PB ratios. Lastly, Tesla's Return on Assets (ROA) is 5.84, while the sector average is at -0.10. While this shows Tesla's ability to generate profit from its assets, the overvaluation concerns remain dominant given the other financial ratios. This is not a comprehensive overview of our valuation, and should not be viewed as financial advice. Always do your own research before considering an investment.