Tesla‘s CAPE ratio

The CAPE ratio for Tesla compares its current stock price to the average inflation-adjusted earnings over the past 10 years. Due to Tesla’s rapid growth in electric vehicles and energy solutions, its CAPE ratio is often higher than traditional companies, reflecting strong future growth expectations. A high CAPE may indicate that Tesla is overvalued, suggesting lower future returns, while a low CAPE could signal undervaluation. Investors use Tesla’s CAPE ratio to evaluate whether the stock price aligns with its long-term earnings potential, keeping in mind its growth trajectory and market disruption.