BYD Trades at 20 Times Earnings. Tesla Trades at 344. Here's Which One I'd Buy Today.
Key PointsTesla's premium valuation reflects opportunities extending far beyond electric vehicles.
Tesla (TSLA) and BYD (BYDDY) are among the world's biggest electric vehicle (EV) manufacturers. However, the prices investors pay for each dollar of profit generated by these companies differ significantly. BYD's stock trades at approximately 20 times trailing earnings, while Tesla trades at around 344 times earnings. This substantial difference becomes even more pronounced when considering what each company sells.
In September, BYD sold 463,561 new-energy vehicles, a 17% increase from the previous year. Overseas passenger vehicle and pickup sales reached nearly 180,000, representing a more than 150% increase. Tesla, on the other hand, delivered 486,532 vehicles during the third quarter, which was better than expected but still down about 2% from the previous year.
The reason for Tesla's higher valuation on an earnings basis is that the market no longer views Tesla primarily as a car company. So, which stock offers a better deal today?
Written by urgent.news from Motley Fool's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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