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Please identify a stock that is overvalued and explain why.

Please identify a stock that is overvalued and explain why.

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Answer #1

The one example of an overvalued stock is Tesla. It has a price to earnings ratio is ~ 42.
The comparable technology stock such as Google (Alphabet has a PE of ~ 22, Facebook has a PE of ~ 19 and Apple has a PE of ~ 11.

By analyzing the price to earnings ratio of comparable stocks, it is clear that Tesla is very overvalued with a price which is much higher as compared to its earning per share.

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