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In January 2021, Tesla Inc shares were priced at $860. The value of the company at that stock price was $810 billion. The reported price earnings ratio TTM (Trailing Twelve Month) ratio in the Financial Times at that date was 1,693. At the same date, Volkswagen (VW) was worth €89 billion and had P/E (TTM) of 18. In January 2021, 15 of the 25 investment analysts following Tesla had buy or hold ratings on the stock and 10 had sell. In finance terms, how can you justify Tesla’s stock price? It is a growth stock, but how can you pay that price for growth?

In January 2021, Tesla Inc shares were priced at $860. The value of the company at that stock price was $810 billion. The reported price earnings ratio TTM (Trailing Twelve Month) ratio in the Financial Times at that date was 1,693. At the same date, Volkswagen (VW) was worth €89 billion and had P/E (TTM) of 18. In January 2021, 15 of the 25 investment analysts following Tesla had buy or hold ratings on the stock and 10 had sell. In finance terms, how can you justify Tesla’s stock price? It is a growth stock, but how can you pay that price for growth?

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter16: Retained Earnings And Earnings Per Share
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In January 2021, Tesla Inc shares were priced at $860. The value of the company at

that stock price was $810 billion. The reported price earnings ratio TTM (Trailing

Twelve Month) ratio in the Financial Times at that date was 1,693. At the same date,

Volkswagen (VW) was worth €89 billion and had P/E (TTM) of 18.

In January 2021, 15 of the 25 investment analysts following Tesla had buy or hold

ratings on the stock and 10 had sell.

In finance terms, how can you justify Tesla’s stock price? It is a growth stock, but

how can you pay that price for growth?

 

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