This is the wildly optimistic view of Ark Investments. Their analysis leads them to believe the stock is going to be worth at least that by 2024.
Give them credit, if nothing else, they are bold in their predictions.
Whether it comes true or not, we have 4 years to wait and see.
Ark CIO, Catherine Wood, felt that stock would be worth between $700 and $4,000 when Elon Musk was talking about taking the company private at $420. It appears she was right, at least about the lower end of her range. The stock is presently trading at about $900.
But anyone who thought that was a bold call hasn’t seen anything yet. On Saturday, ARK published an update to its Tesla TSLA, +0.18% valuation model, saying it now expects the stock to be worth $7,000 by 2024 — and that’s the base case. In a bull case, Tesla shares would trade at, or above, $15,000.
The reasoning behind their forecast is because they believe the cost of Tesla producing vehicles is going to come way down over the next few years. With their advancements in batteries which are a large portion of EV cost, this could be accomplished.
I can say that I am bullish on Tesla but not to this degree. My feeling is this forecast is too aggressive. In one of their videos, they see the total number of EVs sold in 2023 will be around 30 million. I do not see the market maturing that fast. Hence, I think they are overestimating what the number Tesla sells.
Another area to be optimistic about is the energy storage division. Unlike the automobile industry, which could see a decline especially if autonomy enters the picture, this sector is going to increase substantially over the next decade plus. Tesla is working hard on being one of the leaders in this segment.
Even after the insane run up in price, the stock is holding up fairly well. It topped around $969 only to pull back to $700. This rebounded to $900 where it sits right now. Where it goes from here is a guess.
The market seems ready to stage a pullback although Tesla could defy the odds. My view is there will be a 500 handle before this is done but I could be wrong. Tesla is still a heavily shorted stock in spite of the massive losses the shorts endured the last couple months.
Nevertheless, this market has defied expectations on many different levels.
As always, none of this is financial advice.
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Posted via Steemleo
