Tesla's price-earnings ratio (PER) is above 300 times, reviving debate over valuation pressure.

PER is calculated by dividing a stock price by earnings per share (EPS) and is a key indicator of a stock's price level relative to a company's profits. It shows how many times earnings per share the current share price represents. Lower figures are interpreted as undervalued, while higher figures are seen as overvalued.

Cleantechnica, an electric vehicle outlet, reported on April 8 that Tesla has maintained a PER in the 300 to 400 range despite a roughly 20 percent drop in its share price over the past six months. That is far higher than major big tech companies. Over the same period, Apple was around 30, Microsoft and Alphabet were 25 to 28, Amazon was 45 to 60, Nvidia was 50 to 70, and Meta was 22 to 26.

The market is split over whether such a high valuation can be justified. Some investors point to slowing revenue growth and a trend of declining sales and say a PER above 300 times is not sustainable. Others say similar debates have repeated in the past, but a premium is possible as long as expectations for long-term growth hold.

Some assessments also say Tesla's growth narrative has changed from the past. In 2018 to 2019, the company set a target of 50 percent annual growth, but sales have been stagnating in recent years and there have been repeated cases of key timelines being delayed. That is fueling doubts about whether earlier high-growth expectations still apply.

Factors cited as supporting the current share price include the possibility of a sharp rise in future earnings and expectations for its robotaxi business. But analysts say there is no clear basis that results will improve sharply in the short term.

Institutional forecasts are also conservative. JPMorgan forecast Tesla shares could fall an additional roughly 60 percent in 2026. Even in that case, the valuation would remain high, but it could move closer to a normal range than at present.

In its core electric vehicle business, there are also some positive signals. Tesla posted March sales in the South Korean market of 11,134 vehicles, up about 300 percent from a year earlier. But its share of total sales is limited, and first-quarter global sales still showed a weak trend.

It is also pursuing a strategy to expand in Japan. Tesla currently operates 35 stores and 14 service centres in Japan, and plans to increase stores to 60 and service centres to more than 30 by year-end. Sales in Japan last year were around 10,000 vehicles, and it is aiming to become the biggest imported car company this year.

Even so, the prevailing view in the market is that such gradual expansion is not enough to justify the current high PER. Tesla shares have risen about 52 percent over the past five years, but delays to key growth targets and technology schedules over that period are also cited as a burden.

Ultimately, the key question is whether Tesla can translate new growth drivers into actual results. Expectations for an electric-vehicle sales rebound, overseas market expansion and robotaxis persist, but if improved results do not follow, the overvaluation debate is likely to continue for some time.