Tesla Inc. (NASDAQ:TSLA)

The valuation ratios exhibited considerable fluctuation throughout the observed period, spanning from March 31, 2022, to December 31, 2025. Generally, the initial period demonstrated a decreasing trend in all ratios, followed by periods of volatility and, in some cases, a subsequent increase towards the end of the timeframe. The latter half of the period shows a marked increase in valuation multiples, particularly in the final quarters.

Price to Earnings (P/E) Ratio

The Price to Earnings ratio experienced a substantial decline from 123.10 in March 2022 to a low of 40.55 by December 2022. It then showed some recovery, fluctuating between approximately 40 and 70 for much of 2023. A significant upward trend is evident in the final quarters, escalating to 412.00 by December 2025. This suggests increasing investor optimism regarding future earnings or a potential overvaluation.

Price to Operating Profit (P/OP) Ratio

Similar to the P/E ratio, the Price to Operating Profit ratio decreased from 108.47 in March 2022 to 40.14 in December 2022. The ratio remained relatively stable throughout 2023, with values generally between 62 and 68. The final period mirrors the P/E trend, with a substantial increase culminating in a value of 358.92 by December 2025. This indicates a growing premium placed on each dollar of operating profit.

Price to Sales (P/S) Ratio

The Price to Sales ratio followed a similar downward trajectory in the first part of the period, decreasing from 16.63 to 6.28. It exhibited more moderate fluctuations between 6.28 and 9.08 throughout 2023. The ratio increased in the latter part of the period, reaching 16.48 by December 2025, though the magnitude of the increase was less pronounced than that observed in the P/E and P/OP ratios.

Price to Book Value (P/BV) Ratio

The Price to Book Value ratio demonstrated a consistent decline from 30.33 in March 2022 to 9.71 in December 2022. It experienced some volatility in 2023, fluctuating between 10.38 and 16.70. The ratio increased in the final period, reaching 19.03 by December 2025, but remained lower than its initial values. This suggests a changing perception of the company’s asset value relative to its market price.

Overall, the observed trends suggest a period of valuation compression followed by a significant re-evaluation towards the end of the analyzed timeframe. The increasing P/E, P/OP, P/S, and P/BV ratios in the final quarters indicate a heightened market valuation, potentially driven by improved future expectations or speculative investment.

The price-to-earnings (P/E) ratio exhibited considerable fluctuation throughout the observed period, spanning from March 31, 2022, to December 31, 2025. Initial values indicated a high valuation, followed by a period of contraction, and then a resurgence before concluding with elevated levels again.

Initial Contraction (Mar 31, 2022 – Dec 31, 2022)

The P/E ratio began at 123.10 and demonstrated a consistent downward trend, decreasing to 43.65 by the end of 2022. This contraction coincided with a decline in share price, although earnings per share (EPS) generally increased during this timeframe. The decreasing P/E suggests the market’s valuation of each dollar of earnings diminished over this period, potentially reflecting growing concerns about future growth or broader market conditions.

Volatility and Moderate Levels (Mar 31, 2023 – Dec 31, 2023)

The first three quarters of 2023 showed volatility, with the P/E ratio fluctuating between 43.84 and 70.03. The final quarter of 2023 saw a decrease to 40.55, despite an increase in EPS to 4.71. This suggests share price decreased at a faster rate than earnings increased. Overall, the P/E ratio remained within a relatively moderate range compared to the beginning of the observation period.

Increasing Valuation (Mar 31, 2024 – Sep 30, 2024)

From March 31, 2024, through September 30, 2024, the P/E ratio increased from 37.27 to 64.86. This increase occurred alongside a rise in share price, while EPS remained relatively stable. The market appeared to be assigning a higher premium to each dollar of earnings during this period.

Significant Expansion and Subsequent Decline (Dec 31, 2024 – Dec 31, 2025)

A substantial increase in the P/E ratio was observed in December 31, 2024, reaching 181.57, driven primarily by a significant increase in share price relative to EPS. This indicates a very high market valuation. However, this was followed by a decline in EPS and a continued, though less dramatic, increase in share price, resulting in a P/E ratio of 412.00 by December 31, 2025. This final surge suggests a potentially speculative component to the valuation, or expectations of substantial future earnings growth not yet reflected in current EPS.

In summary, the P/E ratio demonstrated a complex pattern of contraction, stabilization, and expansion over the analyzed period. The latter portion of the period, particularly the final year, was characterized by a significant increase in valuation, culminating in a substantially elevated P/E ratio.

The Price to Operating Profit (P/OP) ratio exhibited considerable fluctuation throughout the observed period, spanning from March 31, 2022, to December 31, 2025. Initially, a strong downward trend is apparent, followed by periods of volatility and, ultimately, a significant increase towards the end of the analyzed timeframe.

Initial Decline (Mar 31, 2022 – Dec 31, 2022)

From March 31, 2022, to December 31, 2022, the P/OP ratio decreased substantially, moving from 108.47 to 40.14. This decline coincided with a decrease in the share price and a corresponding increase in operating profit per share, suggesting that market expectations were adjusting relative to the company’s earnings capacity. The most pronounced drop occurred between March and June 2022.

Stabilization and Volatility (Jan 1, 2023 – Dec 31, 2023)

The period from January 1, 2023, to December 31, 2023, showed a more volatile pattern. The P/OP ratio fluctuated between 40.51 and 68.39. While there were increases, the ratio did not return to the levels observed at the beginning of the analyzed period. Operating profit per share experienced a slight decline during this period, potentially contributing to the ratio’s instability.

Significant Increase (Jan 1, 2024 – Dec 31, 2025)

A marked increase in the P/OP ratio is observed from January 1, 2024, onward. The ratio rose from 69.89 on March 31, 2024, to 358.92 by December 31, 2025. This surge occurred despite a decrease in operating profit per share, indicating a substantial increase in investor willingness to pay for each dollar of operating profit. The most dramatic increase occurred between September 30, 2024, and December 31, 2025, with the ratio nearly doubling. The share price experienced a more significant increase than operating profit per share during this period.

Overall, the P/OP ratio demonstrates a complex pattern. The initial decline suggests a recalibration of market valuation, followed by a period of stabilization and then a substantial increase, potentially driven by renewed investor confidence or changing market conditions. The increasing ratio towards the end of the period warrants further investigation to understand the underlying factors contributing to this trend.

The price-to-sales (P/S) ratio exhibited considerable fluctuation throughout the observed period, spanning from March 31, 2022, to December 31, 2025. Initially, a strong downward trend is apparent, followed by periods of volatility and eventual increase.

Initial Decline (Mar 31, 2022 – Dec 31, 2022)

The P/S ratio decreased significantly from 16.63 in March 2022 to 6.73 by December 2022. This decline coincided with a decreasing share price and a steadily increasing sales per share. The most substantial drop occurred between March and June 2022, followed by a more gradual decrease through the end of the year.

Volatility and Recovery (Jan 1, 2023 – Dec 31, 2023)

The first three quarters of 2023 showed some volatility, with the P/S ratio fluctuating between 5.99 and 9.08. However, the ratio experienced a moderate increase in the fourth quarter, reaching 6.28. This period saw increases in both share price and sales per share, but the share price increase was more pronounced.

Further Increase (Jan 1, 2024 – Dec 31, 2024)

The P/S ratio continued its upward trajectory in 2024, rising from 5.46 in March to 13.18 by December. This increase was driven by a substantial increase in the share price, while sales per share remained relatively stable. The most significant increase occurred in the fourth quarter.

Recent Fluctuations (Jan 1, 2025 – Dec 31, 2025)

The final year observed shows a more complex pattern. The P/S ratio decreased to 8.44 in March 2025, then increased to 15.61 in September 2025, before settling at 16.48 in December 2025. This period demonstrates a significant increase in the share price, coupled with a decrease in sales per share, particularly in the final quarter.

Overall, the P/S ratio demonstrates a cyclical pattern with a clear initial decline, followed by periods of fluctuation and a recent increase. The ratio’s movements are influenced by both changes in the share price and sales per share, with the share price appearing to have a more dominant effect on the ratio in the later periods of the observation window.

The price-to-book value (P/BV) ratio exhibited considerable fluctuation throughout the observed period, spanning from March 31, 2022, to December 31, 2025. Initially, a substantial decline in the ratio is evident, followed by periods of relative stability and subsequent increases. The analysis details these trends below.

Overall Trend

The P/BV ratio began at 30.33 in March 2022 and generally decreased through December 2022, reaching a low of 9.71. A subsequent increase occurred through June 2023, followed by further volatility. The ratio concluded the period at 19.03, representing a significant change from the initial value but remaining considerably lower than the starting point.

Decline (March 2022 - December 2022)

From March 31, 2022, to December 31, 2022, the P/BV ratio experienced a consistent downward trend. It decreased from 30.33 to 12.26, indicating a diminishing premium investors were willing to pay for each dollar of net asset value. This decline coincided with a decrease in share price and a concurrent increase in book value per share (BVPS).

Fluctuation and Recovery (January 2023 - December 2023)

The period from January 2023 to December 2023 showed increased volatility. The ratio rose to 16.70 in June 2023 before declining again to 9.71 by December 2023. This period suggests shifting investor sentiment and potentially responsiveness to quarterly performance reports. Book value per share continued to increase steadily during this time.

Recent Increases (January 2024 - December 2025)

From January 2024 through December 2025, the P/BV ratio generally trended upward, although not monotonically. It increased from 8.03 in March 2024 to 19.03 in December 2025. This increase occurred alongside continued growth in BVPS, but also significant fluctuations in share price. The largest single increase occurred between September 2024 and December 2024, moving from 11.96 to 17.66.

Book Value Per Share (BVPS) Trend

Throughout the entire period, book value per share demonstrated a consistent upward trend, increasing from 10.97 in March 2022 to 21.89 in December 2025. This indicates a strengthening of the company’s net asset position over time. However, the P/BV ratio’s movements were not always directly correlated with BVPS, suggesting other factors, such as market sentiment and growth expectations, also played a significant role.

In conclusion, the P/BV ratio experienced substantial changes over the analyzed timeframe. While the ratio demonstrated an overall increase from its lowest point, it remained below the initial value observed in March 2022. The interplay between share price fluctuations and the consistent growth in book value per share contributed to the observed volatility.