Highly Regarded

Is Tesla Inc. (TSLA) Stock Undervalued or Overvalued?

Trailing-twelve-month multiples vs Consumer Discretionary sector peers in our coverage

1205% Premium TTM fundamentals · sector averages from covered peers

TSLA trades at 388.6× TTM earnings — a 1205% premium to its Consumer Discretionary sector average of 29.8× in our coverage.

The Numbers

P/E (TTM)

388.6×

Sector avg: 29.8×

P/S (TTM)

16.6×

Sector avg: 2.5×

Market Cap

$1.57T

EPS (TTM): $1.08

Revenue (TTM)

$94.83B

Net income: $3.85B

Consumer Discretionary Peer Comparison

How TSLA's multiples stack up against sector peers we cover. Click any peer for its own valuation breakdown.

Stock Price P/E (TTM)
TSLA This page $419.67 388.6×
AMZN $244.20 34.1×
NKE $43.32 25.5×

Is the Premium Justified?

July 6, 2026

Tesla's P/E of 385.9x significantly exceeds the consumer discretionary sector average of 148.5x, indicative of high growth expectations. The company reported strong Q2 2026 deliveries of 480,126 vehicles, a 25% year-over-year increase that surpassed analyst estimates and marked its first year-over-year growth after two years of decline. Q1 2026 also saw EPS beat expectations and automotive gross margins improve. Tesla is investing heavily in factory expansion, AI infrastructure, and new ventures like Robotaxi and Optimus. However, despite strong operational performance, the stock's reaction has shown investor scrutiny over potential margin pressures and increasing competition in the EV market, suggesting a shift in focus towards sustainable profitability and autonomy.

Sources

Frequently Asked Questions

Is TSLA overvalued or undervalued?
On trailing-twelve-month earnings, TSLA trades at 388.6x versus a Consumer Discretionary sector average of 29.8x in our coverage — a 1205.3% premium. Whether that's justified depends on growth, margins, and risk; see the context above.
What does the P/E ratio tell you?
Price-to-earnings compares a company's share price with its per-share profits. A higher multiple means investors pay more per dollar of earnings — often for faster expected growth — while a lower one can signal slower growth or higher perceived risk.
Why compare against the sector average?
Valuation multiples vary structurally between industries — software typically trades richer than banks or energy. Comparing TSLA with its own Consumer Discretionary peers is more informative than comparing against the whole market.
Is a cheap stock automatically a good buy?
No. A discount can be justified by weak growth or elevated risk (a "value trap"), and a premium can be earned by quality and consistency. Valuation is one input — pair it with the fundamentals and the AI context on this page.

Methodology

Multiples are computed from trailing-twelve-month fundamentals (from company filings) and the latest share price: P/E is price ÷ diluted EPS, and P/S is market cap ÷ revenue. Sector averages use the Consumer Discretionary names in our 50-stock coverage with positive earnings — a deliberately like-for-like, if imperfect, benchmark.

Stocks with negative trailing earnings are compared on price-to-sales instead. Multiples update with prices and fundamentals; AI context refreshes weekly.

Not Financial Advice

This page is for education and information only. Indicators are mechanical calculations, AI commentary can contain errors, and nothing here is a recommendation to buy or sell any security. Do your own research and consider consulting a qualified financial advisor. See our full disclaimer.

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Same question, Consumer Discretionary peers

AMZN NKE HD