Tesla Motors Inc (NASDAQ:TSLA)’s share price reached a new all-time high of $202.0 before falling back down below the $200 mark (currently $196.6) reports Ben Levisohn for Barron’s, but it’s impossible not to see the fervor that investors still have for this company. When Tesla finally became profitable last year, the bulls sent its stock price surging. Now, excitement about the new Model X and a push into Europe are making Tesla one of the most expensive stocks on the market.

Tesla Motors TSLA

Tesla approached $200 last fall

Tesla Motors Inc (NASDAQ:TSLA) previous approached $200 at the end of October, after increasing almost five-fold in just six months, before falling back to about $120, partially due to a spate of Model S fires and the ensuing bad publicity, but also because investors realized that almost no amount of growth could justify the company’s valuation at the time. Even Tesla CEO Elon Musk said that his company was overvalued at the time (let’s see if he tries to cool his stock price again as it soars past that previous high watermark). At the time, Tesla’s PE multiple was ten times higher than Ford’s, and it must be in the same hard-to-believe range now.

There are solid reasons to be excited about Tesla’s plans for 2014. Pre-orders for the Model X have already passed 1,400 even though the car is expected until 2015 and there aren’t even that many details out about the final specs (apparently people are excited about its ‘falcon doors’), and almost 10,000 preorders overall. The company’s push into Europe and expanding network charging stations are both promising signs that Tesla has a plan both for solid growth and for capturing an audience with strong brand loyalty.

Tesla’s PE largely a matter of opinion

But a recent Seeking Alpha article arguing that Tesla is still undervalued, and that it could hit $500 per share before long, seems to have sparked the recent frenzy. We’ve seen this before, not only with Tesla but also with Netflix, Facebook, and other hot companies that draw big headlines but whose valuations are mostly speculative. Since the stock price reflects people’s current opinion, rather than underlying assets and earnings plus some reasonable growth factor, it can go as high as opinion makers can push it (and fall just as quickly).

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