Buffett Brain · Research note
Score updated 29 Oct 2026 · analysis from 1 Jun 2026
TSLA· Consumer Discretionary
Tesla
Tesla is a fine car company priced as if it already owns the future, trading at 363 times earnings.
Buffett fit
Weak fit
Owner
24
Durability
55
Management
84
Price
0
Score updated 29 Oct 2026 · analysis from 1 Jun 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Consumer Discretionary stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If I owned the whole business at this price, I would be paying 363 times last year's earnings for the privilege.
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The car business is durable in the sense that people will keep buying cars, and Tesla's brand still carries weight, which is why durability scores 55 and not lower.
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Here management earns its keep. The balance sheet is conservative with at just 0.11, net cash on hand with net debt to EBITDA at minus 0.70, and running 1.64 times reported net income, which tells me the earnings are real cash and not accounting fiction.
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There is none, and that is the whole story. At 363 times earnings and an owner-earnings yield of 0.38 percent, the price already assumes a flawless future that has not arrived.
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
7- 1Fortress balance sheet with of just 0.11 and net debt to EBITDA at minus 0.70, meaning more cash than debt.
- 2 is 1.64 times net income, so the reported profits convert into real, spendable cash.
- 3Revenue has compounded at a healthy 15.2 percent a year, showing the top line is still growing.
- 4Interest coverage of 14.4 times means debt servicing is a non-issue for this company.
Concerns
7- 1The valuation is extreme: 363 times earnings, an EV/ of 374, and an owner-earnings yield of 0.38 percent leave a valuation score of 0. The stock is expensive, plainly.
- 2Earnings per share are shrinking, with EPS at minus 10.9 percent while the price assumes the opposite.
- 3The is only 5 percent, carmaker economics that do not justify a software-style multiple.
- 4The scores just 24, with legacy and Chinese rivals crowding in on every model line.
Price history
$404+8.9%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Tesla earns its money building and selling electric cars, with a thinner slice from energy storage, services, and regulatory credits. The sits at 19.1 percent and the at just 5 percent, so this is a manufacturing business with carmaker economics, not the software-like profitability the price implies. Revenue has compounded at 15.2 percent a year, but earnings per share have gone backward at minus 10.9 percent.
How this analysis has moved
The call has held across 6 reviews.
Sep 27, 2026 → Oct 29, 2026
What other investors would say
The same company, judged by three other documented playbooks.
Keep researching
Similar companies in Consumer Discretionary
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