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by pbtflakes 3366 days ago
That's not how the math works out, according to Nasdaq.com Tesla's P/E was -53.63 for 2016 and estimated -103.48 for 2017.
2 comments

Sorry I guess. I couldn't find Tesla's P/E ratio on Google like I could for the other companies. It is my understanding that they don't report P/E ratios for companies with negative earnings.

And it makes sense: a high P/E ratio indicates high potential. The lower the earnings, the higher the P/E ratio. But if earnings went negative, then the P/E ratio would automatically go negative (since that is how math works, as you say). So if my stock price is $100, and I earn $1, my P/E ratio is 100...so much potential! If I accidentally lost a dollar instead, my P/E ratio automatically becomes -100 even though not much changed in my earnings.

The interesting thing is that as soon as you go negative, a larger negative P/E is better than a smaller negative P/E, and it's really wonky at earnings close to 0.
Those numbers are meaningless since Tesla has negative earnings. Infinity is basically right.