| Yet that is what Tesla currently sells for, even though those were its recent financial results. Tesla bulls say look ahead, not back. Well, ok. The consensus of the 34 analysts who cover the stock is that earnings per share will hit $2.08 this year and rise to $2.81 in 2027. That's almost 40% growth. Yet Tesla is still selling for 180 times projected earnings for this year and 135 times projected earnings for next year. Importantly, those projected earnings could be worse. Perhaps even far worse. Tesla has reported profits below Wall Street's consensus estimates in three of the last four quarters. (The first quarter of last year, it announced a 35% earnings miss.) I'm happy to concede that Tesla is likely to grow faster than the average company in the S&P 500. But the S&P 500 trades at just 26 times earnings, a rich historical valuation. Is Tesla really worth 13 times more? I'm skeptical. Longtime Tesla bulls will say they've heard it all before. Skeptics insist the stock is trading at ridiculous levels. Then it goes higher. Yet that depends on your time frame. Tesla currently trades at about where it did in November 2021. Four and a half years with zero return is hardly world-beating. And while the stock is down about 25% from its peak in December, it's hard to imagine that it is undervalued at 350 times trailing earnings and 180 times prospective earnings. You can talk all you want about Robotaxis, Terrafab, Optimus robots and other projected moneymakers. But the smart money invests according to the numbers, not just the narrative. When you buy any company's shares, you're not just buying assets, cash flow and management expertise, you're paying a particular valuation. If it turns out to be unreasonably low, you will probably make money. If it turns out to be unreasonably high, you will - in a best-case scenario - have to wait a long time to make money. Or you may lose money. It might seem like my bearish turn on Tesla - due to its valuation in 2021 - was early. Yet it lost over two-thirds of its value within two years of my January 2021 column. As I said at the time, "[Tesla] carries an unjustifiable and unsustainable valuation, one that will lead to a waterfall drop at some point. That doesn't mean the stock won't eventually recover, however." And that's exactly what we saw. A big drop followed by a substantial rally. I want to emphasize - again - that I have nothing but respect for Elon Musk as a businessman and entrepreneur. And maybe Tesla is truly worth 350 times earnings. Millions of shareholders seem to think so. Some are true believers are willing to hold on to the stock for many years. But my past career as a money manager taught me that only a tiny percentage of investors have decade-long patience and fortitude. The sky-high valuation is a warning sign. Ultimately, shareholders learn the difference between price and value. Price is what you pay. But value is what you get. Good investing, Alex | 
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