Tesla has always had one foot in the auto world and the other in technology. When it comes to its valuation, neither fits.
What’s propelling Tesla’s stock price, since its performance is so-so?
Tesla’s valuation, which hovered around $132 billion after Wednesday’s 17% plunge, reflects a price-to-sales multiple around 5, compared with 0.4 for General Motors Co. and 0.2 for Ford Motor Co. Toyota Motor Corp. and Volkswagen also trade at a multiple of less than 1. Tesla bulls, however, say it’s unfair to compare it with legacy automakers, pointing instead to technology companies as its true peers.
Tesla can’t yet be measured on a comparable price-to-earnings basis because it hasn’t had four straight profitable quarters on a GAAP basis. It was in the black in the last two periods on an adjusted basis.
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