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Is Tesla's Stock Price Crazy or Merely Aggressive?

Placing the company’s valuation into historical context.

John Rekenthaler 30 September, 2020 | 17:38

Step Into the Time Machine

In case you hadn’t noticed (unlikely), Tesla’s (TSLA) stock has levitated. Over the past 12 months, it has gained a cool 808%. If Tesla’s stock continues to increase at that rate, the company will become worth more than all other publicly traded businesses in the world, combined, by autumn 2022. A global equity-index fund would consist of 50% Tesla, 50% everything else!

That probably won’t happen (although with Tesla, one seemingly never knows). The stock’s performance does raise the question, though: How speculative is Tesla’s price? Is the assessment of Tesla’s business prospects unprecedented, or have we experienced such optimism before with other wunderkind companies?

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Alphabet Inc A1,823.76 USD0.11
Amazon.com Inc3,162.58 USD-0.76
Apple Inc122.25 USD-0.56
Berkshire Hathaway Inc Class B231.35 USD0.14
Microsoft Corp214.36 USD0.06
Tesla Inc599.04 USD0.95
Toyota Motor Corp ADR138.28 USD1.04

About Author

John Rekenthaler  is vice president of research for Morningstar.

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