Why I Think Tesla (TSLA) Stock is OVERVALUED!
In today's blog we're going to be talking about Tesla stock. I believe Tesla stock is overvalued. I hope you guys all enjoy this video and if you have any questions go ahead and ask them down below.
Is Tesla stock overvalued?
I do think that Tesla stock is overvalued due to the price-to-earnings being over 1000. this means that the stock is overextended in your paying too much for the earnings. not to mention Tesla's market cap is larger than any other auto manufacturer out there, which would be fine if they had the revenue to match it. Tesla's revenue is a whopping six billion dollars and a net profit of around a hundred million. This makes their margin around 1% which is extremely low for a company, meaning for every hundred dollars that Tesla brings in they keep only $1 as profit.
Why are investors buying Tesla stock?
The very first reason people are buying Tesla stock is because of the stock split. Tesla is doing a 5 to 1 stock split, meaning for each sure you have you will end up with five shares by the end of the split. This is a very bullish move on Tesla's part but makes Tesla stock price extremely overvalued because people are investing with emotion and not fundamentals. I think people have a lot of fomo in the market oh, because they missed out on previous opportunity with Tesla stock and Mayfield this is another opportunity. as investors before the stocks but I think this does not change anything for shareholders.
Should you buy Tesla stock?.
My personal opinion I think that you should hold off a little bit before buying Tesla stock. but if you guys are long-term Believers and you guys feel this is still undervalued I would still recommend using the strategy called dollar cost averaging to get a better average price on your shares.