Cathie Wood and her Ark Invest firm updated its Tesla stock price target to 2,600 by 2029 on Wednesday, the day before the EV company holds its annual shareholder meeting with a key vote on Chief Executive Elon Musk's $56 billion 2018 compensation package. TSLA shares advanced Wednesday.
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Please watch the video at Investors.com - How To Value A Stock: A Discounted Cash Flow Analysis Of Tesla Stock
Ark Invest now has a Tesla stock price target of 2,600 per share in 2029. Its bear and bull cases suggesting TSLA could be valued between 2,000 and 3,100 per share in that year, according to the firm's Tesla stock report release Wednesday.
Wood has long been bullish on Tesla's autonomy push and robotaxi aims. Ark Invest estimates that around 90% of Tesla's enterprise value and earnings will be attributed to the robotaxi business in 2029.
Meanwhile, the firm projects that electric vehicles could be about quarter of total sales and around 10% of Tesla's earnings potential.
"We believe the robotaxi business will have much higher margins," Ark Invest wrote Wednesday.
Without a robotaxi network and business, Ark Invest says its TSLA price target would be around $350 per share, according to the report.
Related video: Cathie Wood Positive About Tesla, Autonomous Driving (Bloomberg)
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"We remain confident that the service will launch within the next five years," Ark Invest said.
In April 2023, Ark Invest projected a Tesla stock price of 2,000 by 2027, with Tesla's robotaxi contributing 67% of expected enterprise value and 64% of expected EBITDA in 2027.
As of June 12, Tesla stock sits first in Wood's ARK Innovation ETF with a 11.09% weight. TSLA shares are second in ARK Autonomous Tech with a 10.76% weight. Meanwhile, Tesla stock is fourth in the ARK Next Generation Internet with a 7.93% weight.
Cathie Wood: Tesla Stock Performance
TSLA shares jumped 3.9% to 177.29 during early market action on Wednesday. Tesla stock dropped 1.8% to 170.66 on Tuesday, trading below its 50-day moving average for the first time since May 13.
Last week, Tesla stock fell 0.3% to 177.48 and shares are now down 4.5% in June.
TSLA declined 2.8% in May and have sunk around 30% so far this year.
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However, Tesla has rallied since reporting first-quarter earnings and revenue on April 23, finding support just above its 50-day moving average, according to MarketSurge analysis. On April 22, Tesla stock hit a 52-week low of 138.80.
The EV giant holds its annual shareholder meeting Thursday. Tesla will then report second-quarter earnings in mid-July. The company is expected to unveil its "robotaxi" on August 8.
JPMorgan analysts on Tuesday said they expected Tesla to show off a robotaxi prototype, but actual robotaxi revenues could be years away. That followed discussions with Tesla investor relations team.
Tesla stock ranks seventh in the 35-member IBD Auto Manufacturers industry group. The stock has a weak 44 Composite Rating out of a best-possible 99. Shares have a 14 Relative Strength Rating and a 62 EPS Rating.
Please follow Kit Norton on X @KitNorton for more coverage.
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Cathie Wood, renowned for her bullish stance on disruptive technologies and innovative companies, has once again made headlines with Ark Invest’s updated Tesla (TSLA) stock price target. According to their latest projections, Ark Invest predicts Tesla’s stock could soar to $2,600 per share by 2029. This optimistic outlook was unveiled just ahead of Tesla’s pivotal annual shareholder meeting, which included a crucial vote on Elon Musk’s hefty $56 billion compensation package from 2018. The announcement coincided with a notable uptick in Tesla’s stock price on the market.
Ark Invest’s revised forecast for Tesla encompasses a spectrum of scenarios, ranging from a conservative estimate of $2,000 per share to an ambitious bull case of $3,100 per share by 2029. These figures underscore Ark’s confidence in Tesla’s ability to capitalize on its advancements in autonomous driving technology, particularly through its ambitious plans to launch a robotaxi service. The firm anticipates that by 2029, a staggering 90% of Tesla’s enterprise value and earnings could be derived from its robotaxi business, which is expected to yield substantially higher profit margins compared to its core electric vehicle (EV) sales.
Critical to Ark Invest’s valuation thesis is Tesla’s potential to revolutionize transportation through its autonomous driving initiatives. They argue that the success of Tesla’s robotaxi network is pivotal; without it, they estimate Tesla’s fair value would be significantly lower, around $350 per share. Ark Invest remains steadfast in their belief that Tesla will successfully launch its robotaxi service within the next five years, a development that could redefine Tesla’s revenue streams and profitability metrics in the years to come.
This latest projection builds on Ark Invest’s previous forecasts. In April 2023, they had projected a Tesla stock price of $2,000 by 2027, with expectations that the robotaxi business would play a crucial role in driving Tesla’s future growth and financial performance.
As of June 12, Tesla holds prominent positions within Cathie Wood’s ARK Innovation ETF, ARK Autonomous Tech ETF, and ARK Next Generation Internet ETF, underscoring the firm’s conviction in Tesla’s transformative potential across multiple technology-focused investment strategies.
Tesla’s stock performance has been marked by volatility, with recent fluctuations reflecting broader market sentiment and periodic investor concerns. Despite challenges and occasional downturns, Tesla has demonstrated resilience, buoyed by positive earnings reports and strategic market maneuvers that have supported its stock price above key moving averages.
Looking ahead, Tesla’s upcoming shareholder meetings and quarterly earnings announcements are expected to be pivotal events that could influence investor sentiment and the company’s trajectory in the near term. These events will likely play a crucial role in shaping perceptions of Tesla’s leadership in the EV and autonomous driving sectors, reinforcing or challenging Cathie Wood and Ark Invest’s optimistic outlook on the company’s future.
