Elon Musk says Tesla (TSLA) is worth $3,000 a share ‘if they execute really well’

[FutureBoy]

Elon Musk says Tesla (TSLA) is worth $3,000 a share ‘if they execute really well’
Fred Lambert - Sep. 4th 2021 12:34 pm PT @FredericLambert

Elon Musk told employees that he agrees with Ark Invest that Tesla (TSLA) is worth $3,000 a share “if they execute really well.”


The CEO has often commented on Tesla’s stock price, but surprisingly, it was often to say that the price was too high.

In 2020, when Tesla’s stock was reaching new high, Musk told his millions of followers on Twitters that he believed the stock was “too high”.

It sent Tesla’s stock crashing, but now it is even higher than when Musk made the comment.

Tesla is currently trading at $733 a share and the automaker is the most valuable automotive company in the world at over $730 billion.

Wall Street firms are divided on whether or not the company is overvalued, but a few of them believe that Tesla could be worth a lot more.

Ark Invest is one of them.

Though to be fair, the company is also a large Tesla shareholders through its investment funds.

This week, they released a new note claiming a $3,000 base stock price target by 2025 for Tesla.

Cathie Wood said about the price target during an interview with Yahoo Finance:

“Our estimate for Tesla’s success has gone up. The main reason for that is their market share. Instead of going down from year-end 2017 to today, it has actually gone up fairly dramatically,”

In its valuation models, Ark Invest believes that Tesla is going to deliver between 5 and 10 million vehicles as soon as 2025.

That’s a significant ramp considering Tesla likely will deliver less than 1 million vehicles this year.

The firm is also betting on Tesla delivering a completely autonomous ride-hailing network, known as Tesla Network, that is going to bring in a lot of money with high margin.

In an email to Tesla employee obtained by Electrek, Elon Musk shared with employees Ark’s new $3,000 price target and that he agrees with Ark:

“If we execute really well, I agree with Ark Invest.”

A $3,000 share price would put Tesla’s valuation at $3 trillion and make it the most valuable company in the world.

Electrek’s Take
Since Ark’s new note was an update on their valuation model and price target, it is fair to say that Musk’s email is basically a direct comment on Tesla’s stock price.

He believes that “if executed really well”, Tesla should be worth $3 trillion within the next 4 years.

To be fair, that’s a longer price target timeline than most, but it’s still rare that Musk comments on the stock price positively.

I remember Musk just a few years ago telling employees to “ignore the stock price“.

Now he is literally sending them an email about the stock price. What changed?

 

[Frank W]

I had just read the story. Wouldn’t that be pretty sweet. The year 2025 will be here before we know it.

 

[FutureBoy]

I had just read the story. Wouldn’t that be pretty sweet. The year 2025 will be here before we know it.

The last time Cathie Wood gave what seemed like an outrageous estimate for Tesla, Tesla hit that estimate much earlier than anyone expected. If I remember correctly it was at least 1 year before Cathie's projected date. Crossing my fingers that Tesla does the same again. It seems there is only so long the market can hide its eyes and deny the extraordinary things that Tesla is accomplishing.

At some point, it's going to be game over for the large dinosaur juice automakers. And who will be around to pick up the slack? Right now, it looks like only Tesla will be there with enough production to fill in what will be needed. Possibly some Chinese companies will be able to scale in the meantime (though I don't hear much about them doing much prerequisite work). And if Jeff Who? really wants to make a name in this industry, he's going to have to upscale Rivian pretty quickly along with expanding the brand to include more than delivery vans, pickups and SUV's. I'm not sure Rivian can iterate fast enough for that.

And in the meantime, Tesla is progressing wildly with FSD. Once FSD is out in general use, it will be SOOOOOOO much harder for other companies to compete. Maybe if comma.ai can get a "good enough" solution working they can help other makers compete somewhat for at least a while.

But while all that is happening, Tesla has solar, megapacks, autobidder, etc on the power side of the business. And there will be so many ways to sell spin-off tech like access to DOJO. I really don't see how any other company can even begin to compete.

And then they announced Optimus. Even if some company were able to somehow compete with the auto and power businesses, Tesla has Optimus up its sleeve. Who knows where that will take them. And by the time Optimus is starting to work in a marketable manner, who knows what else will be coming. It's not like Elon doesn't have any more ideas for products that could be spun up.

 

[Ogre]

People want everything to be black and white.

But there is a lot of nuance to "If we execute well".

If HW4 ships.

If the 4680 is as awesome as they hope.

If Cybertruck gets out the door by Q4 2022.

If production at Tera Texas and Giga Berlin scales as well as they hope.

If they actually release the $25,000 car in 2023.

If FSD 10.x meets the elusive promise of actual self driving.

If...

If...

Also... Musk is an optimist at heart.

 

[FullyGrounded]

Stock price is all about expectation vs reality. Tesla has a high bar already, and it will be tough to consistently exceed the bar they've set for themselves. These delays in CT (and Roadster and Semi) would put the market off, quite a bit. Not good. peace

 

[Ogre]

The Cybertruck delay has been broadcast for months now. It's been like a slow motion announcement. With each announcement or mention of the Cybertruck over the past 6 months making it more clear it was getting pushed out.

But there is a lot going on with Tesla. I know we have a laser focus on the Cybertruck, but Tera Texas is about half dedicated to the Model Y and Giga Berlin was built to make the Model 3 and the Model Y. By the time these 2 facilities finish their ramp, Tesla will have more than doubled production capacity and that's without the Cybertruck.

Tesla's competition is also struggling a lot right now. Most of the major automakers have been hurt far more by the chip shortage than Tesla. In spite of all the craziness, Tesla has still managed to move huge numbers of the Model Y and Model 3. On top of the sheer numbers, they've managed to increase revenue and margins on those same vehicles and increase market share.

It's easier to see why Tesla's stock is where it is now if you pretend future products were never announced.

 

[Crissa]

Ignore the day to day wriggles of price, but have lofty goals.

-Crissa