The company has taken a hit recently. Even though the S&P 500 rose 2% over the same period, the stock has fallen 16%.
One analyst thinks the electric-car maker's shares will go up over the next year. The analyst's updated price target for the stock calls for an impressive 55% upside from where they closed on Friday. This implies a market cap of $1.6 trillion, based on the share count today.
This analyst is bullish.
There is a factory for the electric car company, called theTesla factory. The Motley Fool has an image.
New Street analyst Pierre Ferragu raised his price target on the stock from $1,290 to $1,580.
Ferragu is justifying his price target with a view for record fourth-quarter deliveries, impressive production rates at the company's factory in Shanghai, huge revenue growth next year, and more.
He says that the electric-car company's fourth-quarter deliveries could be as high as 285,000. This range would imply an impressive growth of over 50% year over year and over 15% sequential growth in a supply constrained environment. This would put the total for the year at 910,000, an increase of about 87%.
The analyst thinks that the company's revenue can approach $80 billion. The current analyst estimate is $9 billion higher than this. Ferragu believes that the rate of production at the factory in China is more than one million vehicles per year, which is more than what the company initially said. The analyst believes that adding this production to the factory will help sales next year.
Valuation may be the biggest risk for investors.
The riskiest part of this thesis is Ferragu's view on the high valuation he believes thatTesla stock will command. Ferragu thinks that the company can be traded at 50 to 100 times earnings. The electric-car maker deserves to trade at a multiple like this, but there's always a chance that growth will slow down in the future. If growth does slow over the next five years, the price-to-earnings ratio could fall below Ferragu's target range.
The price-to-earnings ratio of the company is over 300. The electric-car maker has huge growth priced in. Analysts agree that earnings will go up. Analysts think that the earnings per share of the company will increase at an average rate of 73% over the next five years.
There are still risks to owning shares of the stock even though it is looking more attractive. It will take 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884
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