[ELI5] What does it mean when people say that Tesla stock is overvalued?

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I just saw a post that said Tesla stock is only worth 1/5 as much as it’s valued as. It doesn’t make sense to me.

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Anonymous 0 Comments

For the current price, if Tesla takes all the profit every year and give it back to you, it takes 70 years for you to make your money back. (Not accounting for inflation)

If you assume that Tesla can increase its current profit by 20% every year and invest back into itself with the same rate (and still no inflation), it takes 25 years for you to start making profit, but after the next 5 years (year 30), you will triple your money. (Still assuming that it will give back all the profit to you at year 30, which it never will)

Of course you can assume that Tesla will be able to increase its profits at a much higher rate than that and justify the current price, but many people will find that not feasible and even if it did, Elon Musk just can decide not to give you (as the shareholder) back any profit.

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