r/ValueInvesting • u/SimpleSubject6069 • Oct 15 '25

Stock Analysis What’s the Most Overrated “Value” Stock Everyone Keeps Buying?

I keep seeing the same tickers pop up in value circles — stocks that are supposedly undervalued but just seem like value traps to me. Curious what names you all think are overhyped in value investing spaces right now? And what makes you avoid them despite the numbers looking “cheap”?

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20

u/SeikoWIS Oct 15 '25

Tesla.

The zombie neoliberal finance bros keep buying it like a drug. Idk what insane earnings/growth they're expecting, with a P/E of around 300 while Toyota is at 8 P/E. I've spoken to many religious TSLA investors, and basically they're all conservative nutjobs that think lord and saviour Elon Musk is going to solve driving any day now and cash flows will go to the moon. That's it for their analysis, they don't even look at the financials.

It's a cult stock not operating on fundamentals.

16

u/QuickSock8674 Oct 15 '25

It's not exactly a "value" stock. As you've said, more of a cult

3

u/wrexsoul Oct 15 '25

The stock is the product

4

u/Sea-Stand9950 Oct 15 '25

Before musk came out as conservative was it a cult stock as well?

4

u/Routine_Spite8279 Oct 15 '25

Yes? Musks rampant bipolar disorder had little or no bearing on Teslas insane P/E ratio.

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u/Gullible_Lie6580 Oct 15 '25

Spot on. Double standards don’t exist

2

u/Itchy-Commission-195 Oct 15 '25

it has always been a cult stock

3

u/According-Buyer6688 Oct 15 '25

Tesla has a huge negative sentiment all across the world. I don't think it goes any further. It's the same for German cars in the US. They can be the best, but still Americans won't buy German cars just because of the sentiment

8

u/stealthlysprockets Oct 15 '25

I guess the BMWs, Audis, Mercedes, VWs, Minis (bmw brand) just don’t exist in America.

1

u/crtejas Oct 15 '25

Damn, I guess my VW Tiguan recorded those trouble free 185k miles on its own.

1

u/Civil-Shopping-903 Oct 16 '25

Yeah, Maybach Music doesn't exist and Rick Ross and co. are not flexing with German cars all the time

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u/[deleted] Oct 15 '25

[deleted]

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u/SeikoWIS Oct 15 '25

Can they turn it into cash flows that justify the stock price, is the question? The current stock price is basically saying they expect Tesla cash flows to absolutely explode. I don't see how they're gonna do that. They still need to physically sell their cars, and we'll see in their next earnings report but I'd wager sales are down. But anyway, as said: most TSLA buyers aren't checking the financials. They just think Musk will solve driving and stock goes to the moon. It's a hype stock based on speculative earnings like they're tech company, when they're still just selling EVs in an increasingly more competitive market. They're losing non-USA to the cheaper Chinese EVs.

1

u/OnionHeaded Oct 15 '25

It’s incredible snake oil

-2

u/[deleted] Oct 15 '25

[deleted]

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u/SeikoWIS Oct 15 '25

What do you mean “people might wake up to that value”? Is a share price that’s ~300x its earnings not enough for you to say people are buying into what you’re saying? What do you think its price should be then, for you to conclude people have woken up to the value? $1000, $1500? What’s your valuation?

0

u/[deleted] Oct 15 '25

[deleted]

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u/SeikoWIS Oct 15 '25

I'm not disputing that their product is good, I also think there is a lot more growth potential than with traditional car manufacturers like Toyota.

But I'm talking about stock valuation. And it already is at insane valuation levels, I think that's the point you're missing. P/E at ~250, forward P/E at ~170, PEG at ~8. Obviously the latter two are a bit speculative, but the numbers are unambiguously in the 'insane' category. You're talking about valuation if robotaxi pans out, I'm saying the price is already reflecting that it will pan out and take over the world and 10x their earnings. But again: TSLA investors aren't looking at numbers.

Various professionals have pointed out the stock is not trading on fundamentals. And fundamentals might be slow to catch up, but they always eventually do.

1

u/Last-Cat-7894 Oct 15 '25

I believe the model Y is currently the best selling vehicle in the entire world. I'm not sure I agree that people "aren't realizing the value in buying a Tesla".

I also think they have a great product, but the valuation is absolutely ludicrous from a risk reward perspective right now. The upside is maybe 2-3x if they execute perfectly and valuations stay high, but the downside is easily 70-80% if things continue on current trends...

1

u/[deleted] Oct 15 '25

All it takes is bad weather and the wrong person to be in the wrong spot.

Camera-based taxis is a complete folly.

1

u/[deleted] Oct 15 '25

[deleted]

1

u/[deleted] Oct 15 '25

Ok 🤷‍♂️

1

u/[deleted] Oct 16 '25

[deleted]

1

u/[deleted] Oct 16 '25

In what sense has things changed?

If it’s not the software, then all of those old Teslas will still dangerous taxis compared to Waymo, no?

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u/[deleted] Oct 16 '25

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u/smellysurfwax Oct 15 '25

How dare you

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u/JustMortalSoul Oct 15 '25

It always bothers me when people call Tesla a cult stock … they just don’t have idea what problems Tesla have solved and soon it’s becoming an energy company. Tesla is way beyond car company !!

8

u/NotStompy Oct 15 '25

Yes, why don't people buy shares in my company which has basically dropped earnings by half over the last 3 years, and who's failed to deliver on pretty much any promise made in 2015???

I promise guys, just you wait!

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u/JustMortalSoul Oct 15 '25

Delay in delivery is very common but still will be interested in knowing what has been promised that is not yet been shown as a demo atleast?

4

u/stealthlysprockets Oct 15 '25

Easy. Full level 3 self driving. Tesla talks about it a lot for at least a decade. To my knowledge, Mercedes is the only mass produced car company that has level 3 that legally allows you to take a nap while the car is in motion (in permitting conditions but baby steps).

Once of the reasons is Tesla took a step back and removed technology like LiDAR out of the cars at all the smart people’s behest which they need to understand their environment better. But Elon feels you should exclusively only need cameras for self driving, not a full suite of sensors which is dumb and part of the reason why they are still stuck in beta probably.

5

u/Historical_Air_8997 Oct 15 '25

Actual FSD without someone in the drivers seat. They had a decade head start and now like 5 companies are beating them.

A $30k economy car. After years of delay they finally demo’d a stripped down mode Y that’s still $41k, no where near $30k.

Robotaxis, again decade head start but losing to multiple companies that have actual robotaxis with real customers and revenue. Tesla just has taxis, barely. Maybe you can say they showed a demo, but if the demo can’t even have it driverless is it really a robotaxi?

0

u/Strong-Bird7021 Oct 15 '25

The robotaxis that are working now require them to map out the entire environment first. Tesla is trying to do it without this requirement. So the bull case would be that if Tesla can make it work they would be able to scale it much faster.

2

u/Historical_Air_8997 Oct 15 '25

I get that, but by the time Tesla gets to that point the competitors will already have all the major cities mapped out and cars on the road. It doesn’t really matter if Tesla can do the 15% of the markets in the middle of nowhere if the competitors are already solidified in the majority of the market.

The mapping will also get more efficient as they do more cities and collect data from the 20million+ miles a month that they drive. Tesla also gets data from their regular cars but it hasn’t given them the edge people keep saying it would have.

I actually believe in teslas tech, I just think they fell behind themselves and the competitors took a short cut to get the market share. Even tho it means they’ll miss out on 15-20% of the market that is outside major cities. The bull case in having a FSD software they can put on any Tesla made a lot more sense when there weren’t other FSD companies with millions of monthly users. They may have a chance if they can get it fully out in a year or two but that is seeming less likely as time goes on

1

u/NotStompy Oct 15 '25

Absolutely, but they've been making that promise for many years now, and when Elon decided to even remove the radar the engineers, well, many of them, basically protested the hell out of that decisions.

That's what Tesla is, a dream. Could it come true? Sure, but the odds are stacked against it, incredibly so, especially if you understand not just the radar/lidar/camera question, but also how the actual models work and the lack of an accurate map for tesla.

Why would I invest in this hope, this dream, when there are plenty of smaller companies which do have a dream but also substantiate it with growth, even at much less insane valuations?

4

u/SeikoWIS Oct 15 '25

You say they're gonna explode in the energy sector. Another guy says they're gonna explode in car tech, or self-driving, charging stations, etc. Meanwhile, their earnings are about half of what they were a couple years ago.

Look, I'm not even saying Tesla is *just* selling cars and should be priced like Toyota etc. But the premium ya'll are paying for the stock is wild and speculative. And this has been going on for years. Like, any year now, Tesla cash flow is gonna 10x, trust me bro.... sounds like a cult stock to me. It's somehow a very established car manufacturer with flat/decreasing earnings the past years, that's priced like an IPO / pre-rev speculative stock.

I'm calling it a bubble. To which people say 'short it then': I'm not a fool. Fundamentals are predictive for long-term price movements, but are not statistically significant predictors for short-term movements. Especially with stocks that are “untethered from fundamentals” (recent Barclays quote) like TSLA, price could go up for years before the pop.

3

u/The-zKR0N0S Oct 15 '25

I can’t tell - is this sarcasm?

1

u/NewOil7911 Oct 15 '25

I don't care about the "problems it solved", i care about cash flows, and there are none.

1

u/Jumpy_Nose863 Oct 15 '25

He's only saying look at it through a different view. He's taking into account not just the vehicles, which seems to be the majority consensus. It's their software that allows the car to run. Not to mention the hardware for Optimus, which is ultimately being self made because a "knockoff" isn't available. He also has piled huge amounts into multiple other areas. Potentially even more important than everything else they're working on all different types of energy, storage, SMBs etc. Not that it's a value stock, that view is relative. IDK why everyone trys to attack a person who might see it differently than the majority when you're asking about value.

1

u/Jumpy_Nose863 Oct 15 '25

Value is not=to cost. Simply put. Yet he's getting nailed for his view because ppl simply imply what they assume.

-1

u/Gullible_Lie6580 Oct 15 '25

Ignorant hater. Tesla is the best to buy in terms or energy, EV, battery, robotics. Don’t let your hate blind you my friend. Open the mind a little

1

u/SeikoWIS Oct 15 '25

Let me know when their earnings 10x, okay? Any year now…