$ 500 or $ 100: How much does Tesla shares really be in 2025?

Tesla (Nasdaq: TSLA) The stock has recently been on a wild trip. During the last year, it has negotiated as low as $ 169 and as high as $ 488 (it is currently back to $ 249).

The question is: how much is the action really worth? Let's make the numbers.

Solving the true value

There are several ways to calculate the real value of an action. A common strategy is to use a discount cash flow model (DCF). This implies forecasting future cash flows. These cash flows are then discarded using a certain interest rate to obtain a present value and are added to obtain a price of the shares.

However, developing a DCF for Tesla is not easy. To begin with, its cash flows are extremely volatile (the free cash flow in 2024 was $ 1.02 per share in 2024 versus $ 2.17 per share in 2022). Secondly, this is a disruptive technology company that is working on multiple projects, including electric vehicles (EV), autonomous vehicles, battery storage, humanoid robots and artificial intelligence (ai). Therefore, their future cash flows are very difficult to predict.

Using profits per action

A simpler way to obtain an idea of ​​the true value of an action is to analyze the profits per action (EPS) of the company and then apply a multiple of profits to obtain a price of the shares. The multiple of profits is essentially a price to profit ratio (p/e), one of the most common valuation tools for shares.

This approach has its defects (solve the correct multiple profits to apply is difficult). But it can be a good place to start, so we do it for Tesla.

The correct price

By 2025, the prognosis of the consensus analyst for the EPS of Tesla is $ 2.68. This may not be necessary, but I will use this figure in my calculations.

Next, I have applied five different profits multiples to this EPS figure. For the context, the multiple average gains throughout the S&P 500 index are approximately 18 today, while the average multiple in the 'magnificent 7' is around 35 (this has been driven by the high assessment of Tesla).

I think Tesla deserves to trade with a cousin to the S&P 500. After all, it has a lot of long -term growth potential due to its exposure to ai and autonomous vehicles.

That said, its EV business is a car accident at this time (sales collapse throughout the world due to the increase in competition and attitudes towards CEO Elon Musk). So, I am not convinced that the stock deserves a very high multiple.

For me, a multiple of profits of around 40 is suitable for this action. That is more than double the US market average (and higher than Nvidiawhich is in 26).

That gives a price to the shares of $ 107. In my opinion, that is what Tesla's action really is worth today. That is a little more than 50% below the current price of the shares. In other words, I see Tesla as an overvalued today.

It is worth noting that the EPS prognosis by 2026 is $ 3.64. And applying a multiple of gains of 40 leads us to $ 146. That is a significantly higher price, but it is still well below the current price of the shares. Therefore, I will not buy Tesla shares at current prices.