Consumers’ growing interest in electric vehicles (EVs) and substantial investments to reach carbon neutrality allowed EV giant Tesla, Inc. (TSLA) to grow exponentially over the years. Fast forward to today, semiconductor shortage, growing production challenges, and increasing competition are leading to the stock losing momentum. Given the company’s weak growth prospects, its shares look overvalued at the current price level.
In terms of forward EV/Sales, TSLA is trading at 9.83x, 783.1% higher than the industry average of 1.11x. Although an increase in vehicle production helped TSLA improve its financial year-over-year in the second quarter, the performance was weaker than in the first quarter. Therefore, the stock might lose significantly amid the ongoing market volatility.
