NASDAQ:TSLA is not too expensive for the growth it is showing.

Last update: Feb 3, 2025

Our stock screener has singled out TESLA INC (NASDAQ:TSLA) as an attractive growth opportunity. NASDAQ:TSLA is demonstrating remarkable growth potential while maintaining strong financial indicators, making it a reasonably priced option. We'll explore this further.

Looking at the Growth

ChartMill assigns a Growth Rating to every stock. This score ranges from 0 to 10 and evaluates the different growth aspects like EPS and Revenue, both in the past as in the future. NASDAQ:TSLA scores a 7 out of 10:

TSLA shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 103.90% yearly.
TSLA shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 31.78% yearly.
The Earnings Per Share is expected to grow by 27.82% on average over the next years. This is a very strong growth
The Revenue is expected to grow by 18.06% on average over the next years. This is quite good.

Looking at the Valuation

ChartMill assigns a proprietary Valuation Rating to each stock. The score is computed by evaluating various valuation aspects, like price to earnings and free cash flow, both absolutely as relative to the market and industry. NASDAQ:TSLA was assigned a score of 5 for valuation:

Compared to the rest of the industry, the Price/Earnings ratio of TSLA indicates a somewhat cheap valuation: TSLA is cheaper than 69.23% of the companies listed in the same industry.
Based on the Price/Forward Earnings ratio, TSLA is valued a bit cheaper than 69.23% of the companies in the same industry.
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of TSLA indicates a somewhat cheap valuation: TSLA is cheaper than 64.10% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, TSLA is valued cheaply inside the industry as 82.05% of the companies are valued more expensively.
TSLA has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as TSLA's earnings are expected to grow with 24.95% in the coming years.

Assessing Health Metrics for NASDAQ:TSLA

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. NASDAQ:TSLA has received a 7 out of 10:

An Altman-Z score of 17.56 indicates that TSLA is not in any danger for bankruptcy at the moment.
TSLA's Altman-Z score of 17.56 is amongst the best of the industry. TSLA outperforms 100.00% of its industry peers.
TSLA has a debt to FCF ratio of 2.29. This is a good value and a sign of high solvency as TSLA would need 2.29 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 2.29, TSLA belongs to the top of the industry, outperforming 97.44% of the companies in the same industry.
A Debt/Equity ratio of 0.08 indicates that TSLA is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.08, TSLA belongs to the top of the industry, outperforming 82.05% of the companies in the same industry.
TSLA has a Current Ratio of 2.02. This indicates that TSLA is financially healthy and has no problem in meeting its short term obligations.
TSLA has a better Current ratio (2.02) than 71.79% of its industry peers.
The Quick ratio of TSLA (1.61) is better than 76.92% of its industry peers.

Assessing Profitability for NASDAQ:TSLA

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NASDAQ:TSLA scores a 9 out of 10:

TSLA has a better Return On Assets (5.84%) than 89.74% of its industry peers.
TSLA's Return On Equity of 9.78% is amongst the best of the industry. TSLA outperforms 82.05% of its industry peers.
With an excellent Return On Invested Capital value of 6.62%, TSLA belongs to the best of the industry, outperforming 89.74% of the companies in the same industry.
TSLA had an Average Return On Invested Capital over the past 3 years of 11.83%. This is above the industry average of 9.10%.
The last Return On Invested Capital (6.62%) for TSLA is well below the 3 year average (11.83%), which needs to be investigated, but indicates that TSLA had better years and this may not be a problem.
TSLA has a Profit Margin of 7.30%. This is amongst the best in the industry. TSLA outperforms 87.18% of its industry peers.
With an excellent Operating Margin value of 7.94%, TSLA belongs to the best of the industry, outperforming 84.62% of the companies in the same industry.
In the last couple of years the Operating Margin of TSLA has grown nicely.
TSLA has a Gross Margin of 17.86%. This is in the better half of the industry: TSLA outperforms 69.23% of its industry peers.
In the last couple of years the Gross Margin of TSLA has grown nicely.

More Affordable Growth stocks can be found in our Affordable Growth screener.

Check the latest full fundamental report of TSLA for a complete fundamental analysis.

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.