Based on the average analyst estimate for 2023 earnings, shares of electric-vehicle (EV) manufacturer Tesla (TSLA -2.04%) are cheaper than they've ever been. Tesla trades for just 28 times forward earnings, a miserly multiple, compared to any time in the past.

But before anyone starts calling Tesla a value stock, it's important to remember that earnings estimates are just that: estimates. They can be and often are very wrong.

In Tesla's case, there are signs that the company is starting to have a demand problem. It has cut prices in China, which is not something a company does when demand is outstripping supply. There have also been reports that the company was cutting output at its Shanghai plant, although Tesla has denied that rumor.

A recession in 2023 is starting to look like a foregone conclusion. In the U.S., consumers are starting to pull back on spending. The Commerce Department reported on Thursday that U.S. retail sales dipped 0.6% in November as the holiday season got into full swing. This isn't going to be an environment where expensive electric cars will be selling all that well.

There's also far more competition today than at any time in the past in the electric-car market, which isn't a good thing for Tesla's aging lineup. The company is still dominant in the U.S., but its market share is slipping.

Assuming that earnings will continually rise is a dangerous game. You just have to look at Meta Platforms (META 0.27%) and Coinbase (COIN -2.84%) to understand why.

A value stock until it wasn't

Shares of social media giant Meta looked astonishingly cheap last year. The company generated adjusted earnings per share (EPS) of $13.77 in 2021, up 36%. At its 52-week high, Meta stock traded for 26 times those earnings. For a dominant social media company with more than 3.5 billion monthly active users and incredible profit margins, that price seemed too good to be true.

Meta wouldn't need to grow its bottom line all that fast to justify a mid-20s price-to-earnings ratio (P/E). Unfortunately, the company's earnings have plunged, due to a variety of factors. The advertising market is running into a tough economy, privacy changes on Apple's iOS devices have hurt targeted ads, and prolific spending on virtual-reality and metaverse initiatives have eaten into profits. Analysts now expect Meta to earn just $7.86 per share next year, down 43% from 2021.

Meta stock has lost around two-thirds of its value since hitting its 52-week high. It was not a value stock.

Extreme uncertainty

A similar story played out with cryptocurrency exchange Coinbase. The company made a killing during the pandemic-era cryptocurrency boom, with revenue soaring by more than a factor of six and EPS surging by a factor of 10 in 2021. The company produced EPS of $14.50 in 2021, which put its P/E at less than 20 at its 52-week high. As Coinbase stock sank, the P/E tumbled into the single digits.

Coinbase stock looked cheap if you assumed that those earnings were sustainable. They were not. The cryptocurrency bubble burst, prices plunged, and scandals, blowups, and frauds rocked the industry. Through the first three quarters of 2022, Coinbase has reported a net loss of $9.39 per share. The stock is down a whopping 86% from its 52-week high.

A tough road ahead

Tesla is aiming to increase production by 50% annually for the foreseeable future. The law of large numbers, combined with a probable recession, is going to make that hard to manage next year.

The company has boosted its profit margins to impressive levels over the past few years, but that was against a backdrop of strong demand for cars and supply chain constraints that pushed up prices. That extremely favorable environment is gone.

Interest rates have risen dramatically, pushing up the cost of financing a new car. Tesla has reportedly started to offer a $3,750 discount on its Model 3 and Model Y for anyone willing to take delivery before the end of the year. That's not a particularly good sign.

It seems likely that 2023 is going to be a tough year for Tesla. Those earnings estimates are probably not realistic. A new U.S. federal tax credit for EV vehicles starting next year that applies to some Tesla models might help, but that tax credit is also available on plenty of non-Tesla vehicles.

The mistake that some Meta and Coinbase investors made was assuming the future was going to look a lot like the past. They failed to take into account uncertainty.

Right now, there's a lot of uncertainty around Tesla's 2023 results. When you factor in the chance that earnings may fall off a cliff as demand sinks in a recession, Tesla stock is nowhere near as cheap as it looks.