Today’s Tesla seems more like a mature company than ever. Analysts, however, have different views on the direction of the stock’s share price.
After 11 straight quarters of profitability and long-term production goals, Tesla looks more like a mature company today than ever. Analysts, however, have different views on the direction of the stock’s share price.
Analysts covering Tesla have price targets (share forecasts after 12 months) ranging from $250 to $1,620, according to data compiled by Bloomberg. This is the company with the widest gap among all S&P 500 constituents.
Typically, analysts are broadly aligned on S&P 500 stocks and their future stock prices, with the highest price target more than three times the lowest price target in only about 1%, but in Tesla , the highest target price is 6.5 times the lowest.
Gene Munster, managing partner of venture capital firm Loup Ventures, said: “It’s very difficult to value Tesla because the company is involved in some huge potential markets, such as autonomous driving, electric vehicles, robotics and energy, which makes some People think Tesla is a tech company. Others think it’s just a car company. Your position determines your opinion.”
In a way, perhaps Musk’s flamboyant personality, along with the undeniably hip factor of Tesla’s cars, has helped drive investors’ views on the stock, but that doesn’t really help analysts predict the company income for the next few years.
“Looking ahead to the second half of the century and beyond, it remains difficult to predict Tesla’s long-term sales and earnings growth,” said CFRA Research analyst Garrett Nelson. The analyst noted that Tesla’s software sales, Optimus Prime The future of (Optimus) humanoid robots and solar-powered products is still unknown, but he expects the stock to climb to $1,350 next year.
Plus, the stock isn’t cheap from a valuation perspective. Tesla currently trades at 58 times next year’s expected earnings, compared with less than 10 times earnings for all of the world’s major auto companies.
Even assuming Tesla is more of a tech company than an automaker, the stock is very expensive. Data shows that Tesla’s 58 times earnings is higher than FAANG.
“Expectations about Tesla’s future vehicle sales have always been absurd, and those expectations will affect the stock price,” said David Trainer, chief executive of investment research firm New Constructs, noting that the company’s current profits and share price implied The gap between future earnings remains wide and the stock is rated a “sell”.
However, Tesla’s high stock price seems to make sense if you look at it in several other ways. First, the historical performance of Tesla’s stock price appears to be on the bulls’ side. Tesla shares have risen more than 22,000% since going public in 2010, and investors have returned 58% annually. On the other hand, the S&P 500’s return (including dividends) over the same period was just 373%, an average of 15% per year.
Nor has the current economic and political backdrop dampened investor enthusiasm for the stock. Just last month, Ark Investments, a subsidiary of “Sister Wood” Casey Wood, raised its price target for Tesla, and it expects the stock to quadruple to $4,600 by 2026.
In addition, Musk himself is also very popular in the market. The founder and CEO has a large following among retail investors, which is not an easy thing to value. “Few other public figures have captured the attention of retail investors more than Elon Musk,” said Robert Schein, chief investment officer at Blanke Schein Wealth Management.
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