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. Several key financial ratios indicate that the company's valuation may not be justified compared to its peers in the automotive sector. One critical metric is the Price-to-Earnings (PE) ratio, which currently stands at 160.45. This ratio measures the company’s current share price relative to its earnings per share. A high PE ratio often suggests that a stock is overvalued or that investors are expecting high growth rates in the future. In contrast, the sector average PE ratio is only 17.21, indicating that Tesla's valuation is significantly higher than its industry counterparts. Another notable ratio is the Price-to-Book (PB) ratio, which for Tesla is 17.78. This ratio compares a company's market value to its book value, helping investors gauge whether a stock is over or underpriced. The sector's PB ratio is much lower at 1.99, further suggesting that Tesla's market valuation may be excessive relative to its tangible assets. Despite having a commendable net profit margin of 7.30, which outperforms the sector's -0.17, and superior returns on equity (ROE) and assets, these strengths do not compensate for the significant overvaluation indicated by the PE and PB ratios. Investors may want to consider these discrepancies before making investment decisions regarding Tesla. 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.