Louis Basenese, chief investment strategist at the Wall Street Daily, says Tesla’s (TSLA) valuation is completely irrational and its stock vastly overvalued. According to Basenese, while TSLA qualifies as a poster-child against shorting disruptive technologies, the fundamental reasons against buying the company’s stock remain numerous. In fact, Tesla’s current PPS of $148 puts it at a P/E ratio of 99x next year’s estimated earnings, and almost 10x its t-12 sales. Based again on the latest numbers, Tesla’s profit and operating margin stand at (8.6) and (8.2), respectively. Additionally, a $18.2 billion market cap company with revenues of $1.70 billion and an operating loss of about $217 million over the past 12 months suggest overvaluation. So the ticker, up more than 337% this year, is not exactly cheap, any way you slice. Basenese seems to certainly have some good points in his analysis.
Meanwhile, Matthew Argersinger, senior analyst at The Motley Fool, disagrees, saying Elon Musk’s company isn’t just an electric car maker, it’s an ecosystem similar to Apple (AAPL) that will attract new demand.