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Tech stocks - how does Tesla stand?
10 May 2021 (274 views)

Tech stocks have high price earning ratios. They are expected to see high growth in the future.

In the table below, I show the tech stocks arranged by the forward PE ratio. This is based on the analysts forecast of the earnings for next year, i.e. 2021.

The large tech stocks (e.g. Apple, Microsoft, Alphabet)  have a forward PE ratio of 25 to 30.

Amazon has a forward PE ratio of 45, Alibaba, which is in the same industry has a forward PE ratio of 20.

The smaller tech stocks (Square, Roku, Coinbase, Zoom, Tesla) has a forward PE ratio above 69.
 
Tesla has a current PE ratio (for trailing 12 months) of 673. This is expected to fall to 107 for the forward PE ratio. This implies that the earnings for Tesla will grow by 6.2 times. This is the highest growth rate.

At a forward PE ratio of 107, Tesla is in the mid point among the smaller tech stocks, i.e. market cap below $1 trillion.

Tesla is not insanely over valued. If the net earnings double in the following year, the PE ratio will drop to 50.

Tan Kin Lian


 


Tech stocks - how does Tesla stand?
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Tech stocks have high price earning ratios. They are expected to see high growth in the future.

In the table below, I show the tech stocks arranged by the forward PE ratio. This is based on the analysts forecast of the earnings for next year, i.e. 2021.

The large tech stocks (e.g. Apple, Microsoft, Alphabet)  have a forward PE ratio of 25 to 30.

Amazon has a forward PE ratio of 45, Alibaba, which is in the same industry has a forward PE ratio of 20.

The smaller tech stocks (Square, Roku, Coinbase, Zoom, Tesla) has a forward PE ratio above 69.
 
Tesla has a current PE ratio (for trailing 12 months) of 673. This is expected to fall to 107 for the forward PE ratio. This implies that the earnings for Tesla will grow by 6.2 times. This is the highest growth rate.

At a forward PE ratio of 107, Tesla is in the mid point among the smaller tech stocks, i.e. market cap below $1 trillion.

Tesla is not insanely over valued. If the net earnings double in the following year, the PE ratio will drop to 50.

Tan Kin Lian