Tesla's Stock Has Crashed 30% This Year. 1 Thing to Know Before You Buy.

Core Insights - Tesla's stock has decreased approximately 30% in value since the beginning of the year, with its price-to-sales ratio dropping from over 15 to 9.2 [1][2] - The recent decline in Tesla's stock price has reverted its valuation to historical averages, as the valuation had previously soared to over 16 times sales in late 2024 [2][3] - Despite the correction, Tesla's price-to-sales multiple remains above its multiyear average, indicating that the stock is not as cheap as it appears [3][5] Valuation Analysis - Historically, Tesla's valuation has ranged between 5 and 10 times sales, but the recent correction has only brought it back toward these historical norms [3] - The forward price-to-sales multiple, which accounts for expected sales growth, still shows Tesla shares trading slightly above their long-term average [5] - The stock's valuation correction began from abnormally high levels, suggesting that the current price may not reflect a significant discount for long-term investors [6]