- If an investor bought $1,000 worth of the TSLA stock in 2010, it is now worth over $105,000.
- Some investment firms, like Ark Invest, believe the carmaker still has massive long-term growth potential.
- TSLA bulls consider the company as more than a carmaker, considering potentially profitable business lines in the future.
On June 29, 2010, electric carmaker Tesla went public. If an investor purchased $1,000 worth of TSLA stock, it is now worth $105,540.
Returns on TSLA stock when invested in the past 10, 5, and 1 year. | Source: Jon Erlichman
Tesla stock debuted on the Nasdaq stock exchange at around $19.2. Since then, the stock has surged to $2,049, recording a 10,571% increase in ten years.
After 106x Return in a Decade, What’s the Firm’s Biggest Bull Case?
Tesla is now the world’s most-valuable carmaker after it surpassed Toyota’s valuation at $202.74 billion on July 1.
The acceleration of production and deliveries, and the firm’s strong Q2 performance, led Tesla stock to surge.
Although Tesla delivered 50% more vehicles in 2019 than it did in 2018, it shipped 367,500 cars last year. In comparison, Toyota manufactures around 10 million cars every year.
Tesla became the world’s most valuable car company this year. | Source: HECTOR RETAMAL / AFP
Tesla bulls and some prominent investment firms, like Ark Invest, still see massive growth potential in the company.
Tesla might be highly valued when compared to existing carmakers and the automotive industry. But investors consider the company to be more than a car manufacturer.
Former investment banker Matt Smith explained auto sales is one of Tesla’s many potential business lines in the long term. He laid out six major sectors the firm could dominate:
“These are 1) Auto sales (excl FSD) 2) FSD (excl robotaxis) 3) Robotaxis 4) Ride Hailing (pre-robotaxis) 5) Solar 6) Storage, incl V2G 6) corporate / taxes.”
Similarly, Ark Invest emphasized that it expects robotaxis to become a significant business for the company.
Ark Invest’s potential Tesla trend has lofty targets. | Source: Ark Invest
Ark Invest, which manages $11.1 billion in assets under management, reaffirmed its $7,000 target for Tesla stock by 2024. The firm’s research paper reads:
“Based on our updated expectations for electric vehicle (EV) cost declines and demand, as well as our estimates for the potential profitability of robotaxis, our 2024 expected value per share for TSLA is $7,000. To arrive at that base case, ARK has developed a probability analysis with bear and bull price estimates.”
Tesla stock currently has around 186.36 million shares outstanding. A potential stock price of $7,000 per share would place the firm’s valuation at $1.285 trillion.
The Biggest Tesla Bull Will Keep Buying
In May, Ark Invest CEO Cathy Wood said the private investment firm took profits on its Tesla position.a
But Wood noted that Tesla remains the top position in the company’s funds, and it was to control position sizes.
TSLA historical stock price dating back to 2010. | Source: Yahoo Finance
If Tesla stock sees short-term price fluctuations due to various reasons, she reaffirmed the firm would continue to build positions. She said:
“We had an up year, and I think one of the important reasons is we trade around the volatility. If Tesla is going down because some hedge fund or negative analyst is saying something that seems really awful, we have a pretty good handle given our research on that stock that we’ll be buying into it unless it’s a big surprise to us.”
Despite the pandemic, Tesla has successfully recorded four profitable quarters and is now expanding with more Gigafactories planned.
Footage of the firm’s latest Gigafactory construction in Texas show placements of footer reinforcements and outlines of the factory.
Disclaimer: The opinions expressed in this article do not necessarily reflect the views of CCN.com and should not be considered investment or trading advice from CCN.com. Unless otherwise noted, the author holds no investment position in the above-mentioned securities.
Last modified: August 24, 2020 10:24 AM UTC