Tesla is one of the worst performers on the S&P 500 in 2025, after spiking late last year. But Tesla stock is extremely expensive by a price-to-earnings metric.
When a stock sells off hard, investors and Wall Street analysts will often tout it as a buy, citing much-cheaper valuations.
Through March 15, Tesla stock has plunged 38.1% in 2025 — 48.8% from the Dec. 18 all-time high — making it the second-worst performer on the S&P 500 so far this year.
But Tesla's forward price-to-earnings ratio remains very high.
Tesla Stock Valuation
| Date | Tesla stock price | 2025 EPS estimate | 2025 P-E ratio |
|---|---|---|---|
| 12/30/2022 | 123.18 | $7.93 | 15.5 |
| 3/31/2023 | 207.46 | $6.95 | 29.8 |
| 9/29/2023 | 250.22 | $6.20 | 40.4 |
| 10/31/2023 | 200.84 | $5.56 | 36.1 |
| 11/30/2023 | 240.08 | $5.42 | 44.3 |
| 12/29/2023 | 248.48 | $5.29 | 47 |
| 1/31/2024 | 187.29 | $4.36 | 42.9 |
| 2/29/2024 | 201.88 | $4.24 | 47.6 |
| 3/28/2024 | 175.79 | $3.91 | 45 |
| 4/30/2024 | 183.28 | $3.35 | 54.7 |
| 5/31/2024 | 178.08 | $3.32 | 53.7 |
| 6/28/2024 | 197.88 | $3.28 | 60.3 |
| 7/31/2024 | 232.07 | $3.19 | 72.7 |
| 8/31/2024 | 214.11 | $3.18 | 67.4 |
| 9/30/2024 | 261.63 | $3.19 | 81.9 |
| 10/31/2024 | 249.85 | $3.30 | 75.6 |
| 11/30/2024 | 345.16 | $3.34 | 103.3 |
| 12/31/2024 | 403.84 | $3.34 | 120.9 |
| 1/31/2025 | 404.6 | $3.04 | 133.3 |
| 2/28/2025 | 292.98 | $2.90 | 101 |
| 3/15/2025 | 249.98 | $2.83 | 88 |
| Sharp consensus | $2.57 | 97 |
Source: FactSet
Tesla stock bottomed in spring 2024 but really took off after the Q3 earnings report in late October and especially following Donald Trump's election victory on Nov. 5.
Elon Musk made bullish comments about the EV business on the Q3 earnings call, predicting 2024 delivery growth and 20%-30% growth in 2025.
Along with hopes that Musk's close Trump ties would benefit the company significantly, Tesla stock skyrocketed. From Oct. 23, when Tesla reported Q3 results, shares shot up 130% to a record 488.54 on Dec. 18.
Analysts, who had been cutting 2025 EPS forecasts for the prior two years, bumped up targets somewhat, to $3.34 a share late last year.
Still, Tesla's forward price to earnings shot up from 53.7 on May 31 to 75.6 on Oct. 31, 120.9 on Dec. 31 and finally 133.3 on Jan. 31.
On a monthly basis, the TSLA stock price only rose a fraction in January. But the forward P-E kept rising because earnings estimates began falling again.
As it turned out Tesla ended up reporting a slim delivery decline last year. On the Q4 earnings call in late January, Tesla predicted some delivery growth, not 20%-30%. Since then, concerns have grown that deliveries will slide for a second straight year. If so, earnings estimates have a lot further to fall.
Tesla stock sold off 27.6% in February and is down 14.7% so far in March, even with gains late last week.
Tesla's forward P-E ratio is down to 88 due to the lower share price. That's been offset somewhat by a continued to drop in earnings estimates, with the 2025 consensus forecast down to $2.83 a share. But the "sharp consensus" of more recent estimates is down to just $2.57 a share, just 6% above 2024's actual EPS, reflecting increasing concerns that Tesla brand "destruction" is hitting sales.
Tesla's valuation is still far above that of other profitable automakers. Toyota Motor has a forward P-E ratio of 8. General Motors has a forward P-E ratio of 4. Among other profitable EV players, Li Auto has a forward P-E ratio of 18. EV giant BYD, which boasts strong growth and growth forecasts, has a forward P-E ratio of 20.
Ferrari is the only one even vaguely close to Tesla, with a forward P-E of 47.
S&P 500 Stocks: Biggest Losers
| Company | Ticker | 2025 stock price decline as of March 15 |
|---|---|---|
| Deckers | DECK | 41.56% |
| Tesla | TSLA | 38.1% |
| On Semiconductor | ON | 31.50% |
| Teradyne | TER | 31.11% |
| West Pharmaceutical Services | WST | 29.75% |
Tesla Stock Bull Case
The vast majority of Tesla stock's valuation reflects optimism surrounding self-driving, robotics and artificial intelligence. A growing number of analysts explicitly peg most of their TSLA stock price targets on these moonshots.
Musk said on the Q4 earnings call that Tesla will begin paid robotaxi service in Austin this June. But there's skepticism that this will occur, given unofficial data tracking Full Self-Driving disengagements. Musk, who has promised self driving "this year" or "next year" for a decade, will be correct this time. It's possible that Tesla will roll out robotaxis in a small part of Austin, using a human safety driver.
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