Is Tesla's Stock Price Crazy or Merely Aggressive?
Placing the company’s valuation into historical context.
Step Into the Time Machine
In case you hadn’t noticed (unlikely), Tesla’s (TSLA) stock has levitated. Over the past 12 months, it has gained a cool 808%. If Tesla’s stock continues to increase at that rate, the company will become worth more than all other publicly traded businesses in the world, combined, by autumn 2022. A global equity-index fund would consist of 50% Tesla, 50% everything else!
That probably won’t happen (although with Tesla, one seemingly never knows). The stock’s performance does raise the question, though: How speculative is Tesla’s price? Is the assessment of Tesla’s business prospects unprecedented, or have we experienced such optimism before with other wunderkind companies?
John Rekenthaler has a position in the following securities mentioned above: BRK.B. Find out about Morningstar’s editorial policies.
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