Cathie Wood’s Ark has a new price target for Tesla: $ 3,000

Cathie Wood’s Ark Invest Management expects shares of Tesla Inc. will rise $ 3,000 by 2025, up from its current price of $ 655. At that price, the company would be worth nearly $ 3 trillion, based on the number of shares outstanding.

Ark expects there is a 50% chance that Tesla will drive fully autonomously within five years, allowing the company to quickly scale up its planned robotic taxi service, according to a Friday release on Ark’s website.

It also added Tesla’s insurance business to its model, believing that the offering could be rolled out to more states in the coming years at above-average margins, thanks to “highly detailed driving data” the company is collecting.

Wood was one of Tesla’s most ardent supporters and had significant stakes in the company in its flagship fund. When Tesla stock saw a pullback in February, they bought more.

Under Ark’s new model, Tesla could reach $ 4,000 a share by 2025 at best, and $ 1,500 in the case of a bear. The company predicts Tesla sales will be between 5 million and 10 million vehicles by 2025, assuming greater capital efficiency.

The $ 3,000 goal is a long way off “/>higher than any analyst studying the company, the highest being $ 1,200 from estimates set by Bloomberg. Fueled by zealous supporters, Tesla stock rallied more than 740% last year, the best performance on the S&P 500. Elon Musk, the CEO, became the richest person in the world in January, before Jeff Bezos reclaimed the title.

Not close

Analysts have speculated on the prospect of Tesla launching a robotic taxi service since at least 2015, but there is little evidence that the technology will make this possible anytime soon. Tesla recently told California authorities that human drivers still need to constantly monitor a new city streets feature within the “fully self-driving” suite of features sold as part of the Autopilot package.

As for the company’s insurance product, which began in August 2019 and is currently only available in California. The business includes auto insurance revenues in the “services and other” category, along with after-sales services, sales of used vehicles and merchandise. Last year, all those things passed together 7% of the total turnover.

Ark’s model did not take into account Tesla’s energy storage or solar power company, nor did it take into account future price fluctuations for Tesla’s Bitcoin holdings.

Barron’s has previously reported the target price.

– With the help of Craig Trudell

Updates with background information

Source

Share this:

Related