© Reuters. Despite 2023, is Tesla stock undervalued?
to gasoline –
What happened
Tesla (NASDAQ:)’s valuation remained neutral compared to other “Magnificent 7” stocks, Black said in a post on X, formerly Twitter. “Mag 7” is the collective name given to the seven largest large-cap technology stocks, i.e Tesla, Nvidia Corp. (:NVDA), Microsoft Corp . (NASDAQ:), Apple (NASDAQ:), Inc. (NASDAQ:TSLA), Meta Platforms, Inc. (NASDAQ:META), Amazon (NASDAQ:), Inc. (NASDAQ:AMNZ) e Alphabet (NASDAQ:), Inc. (NASDAQ:GOOGL) (NASDAQ:GOOG).
The analyst noted that Tesla’s price-to-earnings growth ratio, or PEG, is 1.9x compared to the group’s average PEG of 1.7x. Nvidia has the cheapest PEG ratio, at 0.9, while Apple is the most expensive, with a PEG of 2.7x.
The PEG ratio is obtained by dividing a company’s P/E ratio by its expected earnings growth for a specific period in the future, typically one to three years. A number less than one indicates that the stock is undervalued, while a stock with a PEG ratio greater than one is said to be overvalued.
Black noted that Tesla offers the highest projected five-year adjusted earnings per share growth, at 33% compounded annually, and also has the highest adjusted P/E for 2024, at 62x.
Because it is important
Tesla is going through a transition phase as investors await the launch of a sub-$30,000 electric vehicle, which many believe should kickstart volume growth. Market observers also see a “halo effect” from the Cybertruck, launched on November 30, 2023.
As the electric vehicle market experiences stagnant growth and competitive pressure intensifies, the company’s fundamental performance may fail to shift into high gear. Bullish analysts, however, see Tesla’s growth story alive and well, with the sum of the parts getting a boost from the monetization of its Supercharger network, the potential commercialization of its fully self-driving software that is in beta advanced testing, from the Tesla bot and robotaxi services.
Tesla closed Friday’s session down 0.18% at $237.49, according to data from Benzinga Pro.
Read the article also in Benzinga Italia