Now the stock trades at around $800.
“As dim as the near-term picture is, Tesla’s long-term prospects are as bright as they have ever been,” said JMP Securities analyst Joseph Osha, in a report after the company’s latest earnings.
Osha, one of the more bullish Tesla analysts on Wall Street, has a $1,020 price target on the stock. He pointed out in his report that “the company has the balance sheet to continue expanding” and that thanks to its $8 billion in cash, Tesla “will be able to ride out the downturn.”
Tesla’s stock is surging despite Musk’s erratic behavior
He also thinks that Tesla will deliver more than 700,000 vehicles to consumers in 2021 — more than the consensus Wall Street estimate of about 630,000.
Tesla’s sales are expected to increase more than 10% this year, an impressive feat given the state of the global economy. And Wall Street is forecasting a nearly 40% jump in revenue for 2021.
Oppenheimer’s Colin Rusch doesn’t think so. He said in a report after Tesla’s last earnings release that because of the company’s “ability to disrupt the auto market,” the stock deserves a much higher valuation that is similar to other tech leaders. Rusch raised his price target on the stock to $968.
“We see potential for Tesla to continue growing at accelerated rates through the end of the decade,” Rusch wrote.
Tesla is priced more like a FAANG stock than the Big 3
Still, other analysts are concerned the stock has run up too high too fast.
“The valuation remains astronomical in our view, given fundamentals look more auto than tech,” said Cowen analyst Jeffery Osborne in a report after the first quarter earnings release.
Osborne gave Tesla credit for weathering Covid-19 challenges in China. But he has a $300 price target on the company because he’s worried about increased competition and the possibility that the Model Y will eat into sales of Tesla’s own Model 3. Both are more affordable vehicles than the luxury Model S and X.
“Simply, we see a lot more that can go wrong than can go right,” Osborne wrote.
Tesla did not respond to requests for comment.
JMP Securities’ Osha said in his report that “the continued management turnover at the company attests to the challenges [Musk] faces as a team builder and leader.”
Osha said that “Musk’s ability to repeatedly achieve what seems impossible is why Tesla exists in the first place, and we can see why Tesla’s board has stood behind him, despite his often erratic public behavior.”
Still, even Musk could find himself in hot water with his board if he continues to act like Elon Musk.
“Elon Musk cannot continue to defy gravity forever though,” Osha added. “Tesla may be better off with a less volatile CEO, with Elon Musk in a creative/technical leadership role.”