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Rekenthaler Report

Is Tesla's Stock Price Crazy or Merely Aggressive?

Placing the company’s valuation into historical context.

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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?

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John Rekenthaler has a position in the following securities mentioned above: BRK.B. Find out about Morningstar’s editorial policies.