Experts are continuing to point out that the stock price of Tesla, an electric vehicle manufacturer in the US, has been overvalued. In a CNBC contribution on the 27th (local time), Michael Farr, CEO of asset management firm Familer & Washington, warned that “Tesla’s stock price is ignorantly expensive” and “too dangerous for investors”. CEO Pa said that Tesla’s stock price-to-earnings ratio (PER) based on next year’s earnings forecast is 168 times, much higher than the S&P 500 average (22.3 times).
Although Tesla is expected to grow rapidly over the next three to four years, he pointed out that the P/E of 2024 is also 77x. “If you look at the PSR, the average of the S&P500 is only 2.7 times, but the average of the Tesla is 13 times,” said Pa. “If you want to gamble, go to a Las Vegas gambling house.”
Chris Harvey, head of equity strategy at Wells Fargo Securities, also warned in an interview with CNBC that “Tesla could take the lead of online service provider America Online (AOL).” Founded in 1983, AOL was once called the king of the information technology (IT) industry with a market capitalization of over 200 billion dollars. However, in the 2000s, with the collapse of the dot-com bubble, it entered a path of decline. Eventually, it was acquired by Verizon, an American mobile telecommunications company, for $4.4 billion in 2015. “When I look at Tesla, I think of 1998,” said Harvey, said. “That year, AOL’s stock price surged like Tesla and was incorporated into the S&P 500 index.” “Since then, AOL has been unable to keep up with the pace of rapidly changing technology, and its influence has greatly diminished.”
Harvey said, “Not only AOL, but there are a number of companies whose market cap has dropped by more than 50% since 1999,” he said. “I am concerned that everything is going too fast this year.” Tesla shares have soared nearly 700% this year. He observed that it is difficult to expect further growth because it has already achieved record growth.
Reporter Park Sang-yong [email protected]
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