Part 8/10:
Valuation Perspectives and Investor Sentiment
From a valuation standpoint, Tesla’s stock trades at approximately 75 times its earnings—significantly higher than the 5-10 times earnings typical in the automotive industry. This premium reflects investor confidence in Tesla’s technological edge but also risks overvaluation if demand weakens.
Some analysts argue that Tesla’s fair value should be closer to $200 per share, aligning with a more traditional valuation based on earnings multiples. The current trading level around $204 per share suggests that the market remains optimistic, but signs of demand weakness and price cuts could threaten this outlook.