In a tumultuous year for stocks, but few stories have been as dramatic as the breakout for Tesla Inc.
The electricmechanic led by billionaire Elon Musk, will begin trading on Monday as a member of the S&P 500 Index, which will mark a series of milestones for 2020. Now a stock that has long been driven by fanatical believers in the celebrity founder has gone mainstream after an eight-fold increase this year.
Here are six graphs showing what a wild ride it has been and why the volatility is far from over.
The long look
Tesla’s revenue growth has been choppy this year, but the stocks are poised for their sixth straight quarterly profit as traders focus on the long-term potential.
Fast moving target
Analysts have struggled to keep up with the exuberance of Tesla investors, who are pushing the stock despite small disappointments and warnings that the stock “dramatically overrated. Tesla shares closed at $ 695 on Friday. At this time last year, the average 12-month price target on Wall Street was $ 58.30.
Huge movements
Tesla was one of the most volatile US stocks this year. It is now common for the value of one-day swings in Tesla stock to exceed the market capitalization of major automakers such as Fiat Chrysler Automobiles NV, Ferrari NV or BMW AG.
Technical extremes
Tesla’s 14-day relative strength index exceeded nearly three out of 10 trading days this year by nearly three out of 10 trading days this year, usually a sign that a stock is ready for a reversal. Not so for Tesla, which closed at an all-time high on Friday.
Richly appreciated
How Tesla should be rated is one of the most contentious issues between bulls and bears. Goldman Sachs says the stock is worth $ 780; JPMorgan’s target price is $ 90. Tesla’s valuation, based on both price-earnings and price-sales ratios, is significantly higher than either Apple Inc. as the NYSE FANG + Index of megacap technology stocks.
The path forward
Skeptics say Tesla’s momentum could break after it entered the S&P 500 as one of the most heavily weighted members, but there is precedent for the rally’s continuation. Like Tesla, Berkshire Hathaway Inc. in the meter with a heavy weighting and, after a brief sell-off, resumed its march to outperform the benchmark for the next five years.
– Assisted by Karen Lin, Jan-Patrick Barnert, Kenneth Sexton and Brendan Walsh