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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
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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 A2,702.51 USD-0.37Rating
Amazon.com Inc3,354.72 USD-0.34Rating
Apple Inc146.95 USD-0.28Rating
Berkshire Hathaway Inc Class B278.78 USD-1.07Rating
Microsoft Corp286.51 USD-0.21Rating
Tesla Inc710.92 USD0.17Rating
Toyota Motor Corp ADR182.18 USD-2.03Rating

About Author

John Rekenthaler  is vice president of research for Morningstar.

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