Shares of Tesla Inc. (NASDAQ: TSLA) closed at their highest level in almost a year on Dec. 16, extending a powerful rally that has been gathering pace in recent weeks. The stock is now up nearly 120% since April and roughly 25% since late November, with the most recent surge driven by renewed excitement around its expanding robotaxi ambitions.
As Tesla pushes through a long-standing layer of resistance and edges closer to blue-sky territory, its valuation has risen just as sharply. The stock’s price-to-earnings (P/E) ratio now sits around 317, its highest level in four years. For most companies, that would be a big red warning sign, especially after its most recent earnings report missed expectations. As is often the case with Tesla, however, the picture is more nuanced, and heading into the final few weeks of the year, there are several reasons to still think it is cheap.
