Tesla (NASDAQ:TSLA ) is oftentimes compared to how Apple (AAPL) was in its high-growth phase. According to this way of thinking, Tesla would continue to provide high returns going forward, just as Apple did over the last decade.

I believe that the comparison between Tesla and "Apple from the past" is not a very good one, due to both fundamental reasons and vast differences between the two companies when it comes to valuation. In short, those that bought Apple during its high-growth phase bought low, while those who buy Tesla now are buying at the high in terms of valuation.

In comments to articles about Tesla, but also in articles themselves, investors sometimes liken Tesla to Apple "from the past", i.e. 5 or 10 years ago. Since Apple has provided attractive returns over that time frame, it is claimed that Tesla would generate attractive returns going forward. This does include claims that Tesla would eventually be valued at $2+ trillion, based on the fact that Apple is valued at $2+ trillion right now. I believe that Tesla versus Apple is not a great comparison, however. Let's first examine fundamental differences.

Apple is one of the strongest companies fundamentally, but the same can't be said about Tesla:

Note: More on Cisco later, but it is quite clear that it also has better fundamentals than Tesla.

In the above table, we see that the fundamental differences between Apple and Tesla are extreme. Apple generates a return on assets in the high-teens range, whereas Tesla manages to generate a meager 1% return on assets. Similarly, looking at ROIC and Greenblatt ROC, Apple is operating in a different league compared to Tesla. Not only capital efficiency is a differentiator, though, but the same also holds true for the margins that these companies generate. Apple sports a gross margin of close to 40%, whereas Tesla's gross margin is a paltry 5%. Last but not least, Apple's net margin is 15 times as high as that of Tesla -- Tesla needs to generate 1,400% more revenue than Apple for $1 in net profits. Apple clearly is a leader in its industry profitability-wise, whereas Tesla is in the middle of the back in its industry.

The differences between Apple and Tesla also are meaningful in other measures of quality, such as the respective balance sheets: Net debt to EBITDA stands at 0.2 for Apple, and at 2.0 (10x Apple's reading) for Tesla. The cost of debt is 2.7% for Apple and 4.5% for Tesla, and so on. To me, it is quite clear that Apple is a far superior company fundamentally speaking. Now you may say that this is true right now, but that the comparison is made to the Apple from the past, and that fundamentals may have looked different back then -- a valid point. So let's take a look at what Apple's fundamentals looked like when it traded at $450 billion, the market capitalization Tesla is trading at right now. Apple first crossed a market capitalization of $450 billion in early 2012:

Looking at the Apple from early 2012, i.e. the $450-billion-Apple, we see that its fundamentals were outstanding. In fact, it looks like they were even better than they are today. Apple's return on assets was 30%, its return on equity stood at 45%, its gross margin and its net margin both were industry-leading (and at a higher level than they are at right now). Last but not least, it had a fortress balance sheet back then, with negative net debt, which means that its cash holdings were larger than its debt, by dozens of billions of dollars.

Comparing the Apple from early 2012 to the Tesla of today (both valued at $450 billion), it seems quite clear that those companies are operating on different levels -- Apple had outstanding fundamentals, while Tesla's look mediocre at best.

Apart from these quantitative differences, I also see qualitative differences. Apple operates in a less cyclical industry, its products have a shorter useful life (which means that replacement purchases happen more often), Apple generates a bigger portion of its revenues through high-margin subscription services, etc. Due to the fact that Apple does not manufacture its phones, it does not have to invest large sums of money in factories & tools, which is why its free cash flows are so high. This, in turn, allows Apple to return huge amounts of cash to its owners -- Tesla has never done so, ever, in its entire history. For comparison, Apple started both its dividend payments and its stock buybacks in 2012, the year it hit a $450 billion market capitalization.

To sum this section up, I believe it is not an exaggeration to say that Apple is a superior company compared to Tesla, and that also holds true when we compare 2020's Tesla to 2012's Apple.

There is another reason why I believe that the comparison between Tesla and Apple is not a good one, however, which is the valuation these companies are/were valued at.

Looking at Apple from 2012, we see that shares were quite inexpensive:

At the time Apple first hit a market capitalization of $450 billion, Apple's shares were trading for ~15 times net profits, and for ~14 times free cash flow. This is not at all a high valuation, not even for an "average" stock, let alone for a quality growth stock such as Apple. Other valuation metrics also point to the same conclusion. Apple's EV to EBITDA ratio stood at ~10, which is inexpensive, and its price to sales ratio was around 4. Overall, Apple was a great growth stock back then, sporting excellent fundamentals, and yet it was trading at a pronouncedly inexpensive valuation.

Jumping eight years to the future (summer 2020), and looking at Tesla, we get a very different picture:

Tesla trades at 1270 times net profits, at 590 times free cash flow, while its EV to EBITDA ratio stands at 120. Tesla's price to sales ratio stands at 18, which is higher than Apple's price to earnings multiple from 2012 (sounds absurd, but it is true).

Depending on what metric one chooses to focus on, Tesla is trading at 4.5 times to 90 times Apple's valuation from 2012, when Apple was at the same "level" from a market capitalization perspective. Even using the comparison that is most favorable for Tesla, i.e. price/sales, Tesla trades at a premium of hundreds of percent compared to 2012-Apple -- despite 2012-Apple being the higher-quality company.

Investors who bought Apple's shares in 2012, when the company first breached a market capitalization of $450 billion, were rewarded by hefty total returns since. Rightfully so, after all they made a great choice: Buying a high-quality growth company with excellent fundamentals at a very low valuation.

Tesla in 2020 is quite different to that, as it is much less of a quality company (fundamentally speaking, and I believe this also is true when looking at soft factors such as the cyclicality of the industry), while it is trading at a valuation that is, at least, very high.

I am not denying that Tesla will continue to grow -- it is active in a growing market, thus the company should be able to increase the number of cars it sells, even though the competition is growing. But a positive growth outlook for the industry does not necessarily equate to attractive returns for equity owners, especially when equity holders enter positions at valuations that are too high.

Enter Cisco (CSCO) from 2000: Cisco was a leading company in a relatively new and fast-growing market back then, and the market rewarded the company by paying a quite high price for its shares.

In the above chart, we see Cisco's valuation as well as some of its fundamentals at the time when shares peaked at ~$80. Cisco was growing its revenues at a 55% pace back then (faster than Tesla), sported an outstanding gross margin of 65%, and generated a return on assets of 13%. Overall, one could thus argue that Cisco was a better/higher-quality company back then compared to Tesla today, thanks to higher margins and capital efficiency, coupled with faster growth.

Cisco's shares traded at a quite high valuation back then, with its PE ratio standing at ~220 and both its free cash flow multiple and EV to EBITDA ratio standing at around ~100. This is, however, still a lower valuation compared to how Tesla is valued today, as shown earlier. What did Cisco's share price performance look like over the next 20 years? Cisco as a company continued to grow, but to this date, its shares trade below the price that was hit in 2020. So one can say that, despite very strong growth and strong fundamentals, buying Cisco in 2000 was a disastrous investment decision.

Considering the fact that Tesla is trading at an even higher valuation today, while offering weaker fundamentals than Cisco in 2000, makes me believe that the future share price outlook for Tesla is not an especially positive one.

I believe that Tesla is substantially overvalued right here, but of course, this could change in case Tesla comes up with a game-changing new product that justifies the current valuation. If Tesla manages to grow way faster than analysts are currently expecting, then the current valuation may be justified. I personally do not see any technology that would deliver this kind of surprising, outsized growth on top of what analysts are currently forecasting.

I also do not believe that it is a good idea to short Tesla's stock, on the basis that shorting always is dangerous. Expensive things can become even more expensive, thus the fact that Tesla is trading above fair value does not mean that its share price will necessarily go down in the foreseeable future.

Some investors think that Tesla will be the "next Apple" and that Tesla's market capitalization will rise to trillions of dollars, while its shares will provide huge returns for shareholders. When we compare Tesla to how Apple looked like when it was trading with a similar market capitalization, the differences are very large, however. Back then, Apple had far superior fundamentals and was trading at a valuation that was not anywhere close to how Tesla is valued today.

Tesla, today, looks more like Cisco in 2000 -- a company in a growing industry, generating sizable revenue growth, but trading at an absurdly high valuation. Buying Cisco back then has not worked out well for investors, and I believe that the same could come true for those that buy Tesla today. I still do not believe that shorting is a good choice, however, as bubbles can always grow even bigger before deflating eventually.

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Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.