Today is Thursday, May 14, 2020, and we’re looking at the recent performance of Tesla stock (NASDAQ: TSLA). What caused its price movements over the last month? And what do its prospects look like? Let’s find out…
About Tesla
Tesla is an American sustainable energy and transportation company known for its electric cars, solar panels, and batteries. It currently has a market capitalization of $149.13 billion.
Tesla’s Price Movements
Tesla shares rose 21.51% in the last month because the company has started to reopen its factories, which have been shuttered for weeks due to the COVID-19 pandemic.
With these recent price movements in mind, let’s see how expensive Tesla is relative to its peers.
Tesla’s Valuation Today
The company’s price-to-earnings (P/E) ratio of 191.93 is 1,522.40% higher than its industry average of 11.83. That’s not good.
A company’s P/E ratio shows its price as a multiple of its earnings per share (EPS). A relatively low P/E ratio is generally an indicator that a company is undervalued, while a relatively high P/E ratio is generally an indicator that a company is overvalued.
But valuation metrics like P/E are never static for long. They’re especially affected by earnings reports…
Tesla’s Near-Future Prospects
Tesla’s next quarterly earnings report is expected on Friday, July 24, 2020. It’s worth watching what that next quarterly earnings report will do to the company’s price and valuation.
The Takeaway
In summary, recent events have pushed Tesla shares up in the last month. They’re now overvalued relative to peer companies on a P/E basis — but that could change when the company releases earnings in July.
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