Tesla has tumbled this month on third-quarter delivery figures and the Oct. 10 robotaxi event. Once again, Tesla stock is down for the year. But it's gotten much more expensive by one key metric.
Tesla stock, while well off 2024 lows, is down 11.8% this year, thanks to October's near-17% tumble. However, earnings estimates have fallen much faster, though the pace of cuts has slowed in recent months.
Tesla Stock Valuation
| Date | TSLA price | 2024 EPS estimate | 2024 P-E ratio | 2025 EPS estimate | 2025 P-E ratio |
|---|---|---|---|---|---|
| Dec. 30, 2022 | 123.18 | $7.07 | 17.4 | $7.93 | 15.5 |
| March 31, 2023 | 207.46 | $5.62 | 36.9 | $6.95 | 29.8 |
| Sept. 29. 2023 | 250.22 | $4.67 | 53.6 | $6.20 | 40.4 |
| Oct. 31, 2023 | 200.84 | $3.94 | 51 | $5.56 | 36.1 |
| Nov. 30, 2023 | 240.08 | $3.86 | 62.1 | $5.42 | 44.3 |
| Dec. 29, 2023 | 248.48 | $3.81 | 65.3 | $5.29 | 47 |
| Jan. 31, 2024 | 187.29 | $3.14 | 59.7 | $4.36 | 42.9 |
| Feb. 29, 2024 | 201.88 | $3.09 | 65.3 | $4.24 | 47.6 |
| March 28, 2024 | 175.79 | $2.85 | 61.6 | $3.91 | 45 |
| April 30, 2024 | 183.28 | $2.48 | 73.9 | $3.35 | 54.7 |
| May 31, 2024 | 178.08 | $2.43 | 73.2 | $3.32 | 53.7 |
| June 28, 2024 | 197.88 | $2.39 | 82.9 | $3.28 | 60.3 |
| July 31, 2024 | 232.07 | $2.26 | 102.5 | $3.19 | 72.7 |
| Aug. 30, 2024 | 214.11 | $2.24 | 95.7 | $3.18 | 67.4 |
| Sept. 30, 2024 | 261.63 | $2.24 | 116.8 | $3.19 | 81.9 |
| October 14, 2024 | 219.16 | $2.24 | 97.8 | $3.14 | 69.8 |
Source: FactSet
Analysts now see Tesla earnings per share at $2.24, roughly steady vs. the past few months. But that's down from $2.39 at the end of June, $3.81 at the end of 2023 and a whopping $7.07 at the end of 2022.
So the 2024 price-earnings ratio for Tesla stock is now 97.8. While down from Sept. 30's 116.8, it's far above the 65.3 reading at the end of 2023 and 17.4 at the end of 2022.
The same trend holds for 2025. Analysts have cut Tesla's EPS estimates for 2025 to $3.14 as of Oct. 14 vs. $5.29 to close out 2023 and $7.79 at the end of 2022.
The 2025 P-E ratio for Tesla stock is now 69.8. That's down from Sept. 30's 81.9 due to the lower TSLA stock price now. But it's up from 47 at the end of 2023 and 15.5 on the final trading day of 2022.
Tesla's valuation is far above that of other profitable automakers. Toyota Motor has a March-ended fiscal 2025 P-E ratio of 8. General Motors has a 2025 P-E ratio of 5. Among EV players, Li Auto has a 2025 P-E ratio of 16. EV giant BYD has a 2025 P-E ratio of 16.5.
Nvidia stock has nearly tripled this year. Its current P-E ratio is 61, but its January-ended fiscal 2025 P-E ratio is 49 thanks to still-booming growth and strong earnings estimates. Its January 2026-ended fiscal 2026 P-E ratio is only 34.
Investor's Business Daily usually doesn't focus on price-earnings ratios, because many leading stocks boast high valuations as investors bet on strong growth to justify them. During its huge run, Tesla was a growth company, often with high P-E ratios. But it's not a growth company right now.
Tesla Bull Case
Of course, the bull case for Tesla is looking beyond 2025. Many analysts ascribe much or most of their Tesla stock price targets to outside of EVs and for big bets on self-driving, robotics and artificial intelligence.
Clearly, much or even most of Tesla's current market valuation is a bet that some of those moonshots will pay off down the road, delivering massive profits.
Please follow Ed Carson on Threads at @edcarson1971 and X/Twitter at @IBD_ECarson for stock market updates and more.
