Highly Regarded

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

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

1050% Premium TTM fundamentals · sector averages from covered peers

TSLA trades at 340.6× TTM earnings — a 1050% premium to its Consumer Discretionary sector average of 29.6× in our coverage.

The Numbers

P/E (TTM)

340.6×

Sector avg: 29.6×

P/S (TTM)

14.6×

Sector avg: 2.6×

Market Cap

$1.38T

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 $367.81 340.6×
AMZN $259.85 36.2×
NKE $39.07 23.0×

Is the Premium Justified?

August 9, 2026

Tesla Inc. (TSLA) commands a P/E multiple of 304.2x, significantly above the Consumer Discretionary sector average of 122.3x. This premium valuation suggests high investor expectations for future growth, despite recent profitability pressures. In the second quarter of 2026, Tesla reported a 26% year-over-year revenue increase, marking two consecutive quarters of growth acceleration. However, gross margin contracted to 16.83% and operating margin fell to 1.41%, impacting adjusted earnings, which declined by 18%. The company continues to invest heavily in its AI and robotics initiatives, including Optimus and Robotaxi development, alongside strong growth in its energy storage business. These long-term strategic ventures are key to its growth narrative. Nevertheless, intensifying competition in the EV market, particularly in China, and a reported decline in global EV sales in Q1 2026, including a 20% drop in U.S. sales, present headwinds that pressure its automotive margins and market share.

Sources

Frequently Asked Questions

Is TSLA overvalued or undervalued?
On trailing-twelve-month earnings, TSLA trades at 340.6x versus a Consumer Discretionary sector average of 29.6x in our coverage — a 1050.1% 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

NKE AMZN HD