Tesla stock (NASDAQ:TSLA), has had a wild year. Initial shares surged by more than 20% when the year began. The stock now has a negative 1% year-to-date return, losing all its gains. This means that the stock is significantly below the S&P 500's 18% gain in this year.One analyst believes the stock could rise."We really like this stock."Alexander Potter, Piper Sandler analyst, made a bold call in February. He raised his 12-month price target of the growth stock from $515, to $1,200. He predicted that Tesla deliveries would rise from 500k vehicles in 2020 to almost 900k this year. This projection was made before global shortages became worse. Tesla is still growing at an incredible rate. Tesla's second quarter deliveries increased more than twice compared to the previous year, reaching 201,304.The analyst reiterated the target following Tesla's second quarter earnings release late last year. He noted that Tesla looks poised for market share gains, the monetization and "underappreciated potential" in its energy business. This includes revenue from solar energy generation and battery energy storage.Potter also pointed out Tesla's 11% second-quarter operating margin. He expects that there will be incremental improvements from Tesla's Autopilot subscription.Potter reiterated his overweight rating for the stock on Aug. 3 and set a $1,200 price goal. He stated, "We still really love this stock." Potter cited the growing demand for electric vehicles in general.What's the answer?If shares could rise to $1200, why are so many investors believing the stock is worth less? This is based on the stock's current price of $700 as of the writing. Shares would trade significantly higher if Tesla stock was expected to rise to $1,200 within the next twelve months.It all boils down to the stock’s forward-looking value. Tesla shares have a strong price to earnings ratio of around 370 as of the time this writing. This makes them well-priced for continued growth over the years. Because the company's valuation relies heavily on future profits, any slight variation in Tesla's growth trajectory could result in drastically different assumptions regarding the stock's intrinsic worth today.Investors shouldn't rush to buy Tesla stock because one analyst has a high target price for shares. Potter has some positive points to make about Tesla's business momentum. Tesla reiterated its guidance that vehicle deliveries should grow by more than 50% in the current year. This guidance came at a time when many businesses around the globe (including Tesla) are being negatively affected by shortages of supply chain. In its second quarter update, Tesla management stated that the demand for its vehicles was at an all time high heading into Q3.Although a target price of $1,200 for Tesla stock is difficult to justify it may be possible to buy shares at a low enough level to begin a small position.
