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Tesla stock can be overvalued or undervalued. It just depends on what benchmark you want to use. Since Tesla has more growth than value, we compared the company's simple valuation ratio (7) to the top ten largest companies in the world (average is 8). That doesn't prove Tesla stock is undervalued because we need to compare apples to apples which is what Tesla does today compared to other companies in the same business. Right now Tesla is an automaker with quite good gross margins compared to the competition. Those of you who love price targets will be interested to know that Tesla would trade under $20 a share were it valued the same as competitors like Ford or General Motors. Those latter two names represent companies with a massive amount of debt that had problems navigating the 2008 financial crisis. Tesla is in much better shape with a strong net cash position and little debt. The reason investors are overvaluing Tesla stock is because they see a company that may be able to use generative AI to solve the autonomous driving problem - it's ARK Invest's robotaxi thesis that sees Tesla shares hitting $2,000 by 2027. Love Elon Musk or hate him, our video on Tesla's valuation will teach you something.

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