Tesla, one of the world's most powerful businesses, is a consortium of a select firm with a market capitalization of more than $1 trillion. The electric vehicle maker, led by influential CEO Elon Musk, is also one of the world's most hyped stocks with the highest price-to-earnings ratio among the top 20 largest corporations worldwide.
Model S Plaid electric vehicle from Tesla is shown in Figure 1.
Tesla is a Tesla member who has made a comeback with a Tesla car.
Almost all bears are sceptical about Tesla stock's () - valuations, but bulls support their case on Tesla's disruptive technology, business model, and the Elon Musk factor. Today, we take a closer look at what bulls and bears have been saying about TSLA stock.
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Tesla's bull case is a testimony to Tesla's bull case.
Wedbush's Daniel Ives, a tech analyst, sees TSLA $1,400 share price as a base case in the next 12 months and $1,800 as a bull case.
Tesla has enormous potential in China, accounting for a large portion of the electric vehicle deliveries, Mr. Ives has stated.
While we were front and center in China earlier this year, we have seen this demand trend reverse aggressively in a bullish fashion for Tesla into year-end, with the company now on a 50k monthly run-rate for China into 2022.
Dan sees the growth in the automotive industry as generating a $5 trillion market opportunity for the next 10 years, thanks to Tesla's leadership, as well as the bullish Tesla market.
The Wedbush analyst didn't forget about the chip shortage crisis, which has impacted Tesla and the whole auto industry this year, but the analyst believes that these issues are transitory, and strong demand for Model 3 and Model Y should outperform supply by 15%.
Jefferies' Philippe Houchoi, who is just as bullish as Wedbush, is his TSLA price target of $1,400, and maintains his buy recommendation on the stock, according to the analyst. He attributed his optimism to the impressive results of Tesla's last two quarters. Third quarter gross margins of almost 30% bring hope of a profitable EV space.
Tesla is getting to a place where "it can balance affordability and speed," according to Mr. Houchois, which is in accordance with Elon Musk's vision. In the end, the analyst mentioned Tesla's capacity to grow beyond what other EV original equipment manufacturers (OEMs) could.
"With an acceleration of self-funded growth in Q3 and unreleased returns at a brand price point moving toward volume segments, Tesla appears more scaled up today than most OEMs and in position to transform the legacy zero-sum-game into a negative one."
The Tesla bear case is a case that is controlled by the Tesla bear case.
Stuart Pearson, BNP Paribas' TSLA sell recommendation, recently went on to $780, despite raising the price target to $780, which still implies 23 percent downside risk.
Pearson views competition as a threat for Tesla. The business is making minimal progress on new income streams, raising the possibility of a new capital raise, and the trillion-dollar valuation is hard to justify, but his price target bump is based on Tesla's near-term pricing tailwinds.
Barclay's executive, Brian Johnson, noted that Tesla's management had flagged numerous headwinds during the earnings call, including commodity costs, production difficulties, batteries delays, and total self-driving way below Tesla's robotaxi potential.
The Barclay analyst has a sell recommendation on TSLA, and forecasts a slight drop of 76 percent in shares to only $300 ahead.
Is the price correct?
When examining a business's corporate basics is just half the effort necessary to obtain a good stock, how much one pays to own the shares is a critical factor in the investment's profitability. This is why valuation analysis is so critical.
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