The Tesla Bubble and why P/E Ratio's MatterTesla is high by any standard value or technical view.
Here I use the PE ratio as compared to TSLA, AMZN, AAPL and GOOGL and a super stock I am going to call "Amagoogle" to demonstrate just how overdone I think Tesla is.
To summarize, I will show:
How relative P/E (Price to Earnings Ratio) compare. Growth stocks typically have very high PE ratio's , mature industries like utilities and consumer staples tend to be on the lower side. For a benchmark, the S&P 500 PE right now is 37.97 with it's all time high spike at 123.73 and it's low at 5.31. The average is 15.88. Telsa's is currently 1,637 ! www.multpl.com
If Tesla had Alphabet's earnings but maintained it's current PE, it would have to trade at $84,708 PER SHARE
If Tesla had Apple's very high PE, it would be trading at $45.50 per share.
If Telsa had a double whammy of Alphabet's great EPS AND Apple's arguably very high PE, Tesla would be at $4,709 per share - but that would mean a growth in earnings of 103.58 TIMES.
Book recommendation to help avoid these scenario's: read.amazon.ca
Happy Trading!
Rob
