Tesla's fundamentals are weak. Revenue and income has been declining YoY for two consequtive quarters now. Vehicle deliveries declining. Their market is getting eaten away by competitors and they have no strategy to combat that. Reliability (a proxy for product quality) is mid-tier. Their R&D projects are missing schedules for a while, and has no substance.
Even though there aren't much positive indicators around the stock for a while now, why do they have such a high P/E ratio (60 as of this post)? What is the justification?
A typical response may be “because Elon is a good liar” or some anti-Elon emotional take, but I refuse to believe that such a superficial factor can support such a high P/E ratio. The average P/E ratio of other top car manufacturers is around 18. I can believe it if the Elon factor pushes it up to around 30, but 60 is just ridiculous.
What are the investors and traders looking at? Am I missing something? Or is this a purely speculative bubble and are we in for a royal shitstorm when it pops?
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