Tesla Analyst Says Stock Worth Only $135 If Just EVs Were Considered, But Sees This Segment As 'Important Growth Driver'
Portfolio Pulse from Shanthi Rexaline
Piper Sandler analyst Alexander Potter reduced the price target for Tesla, Inc. (NASDAQ:TSLA), emphasizing the importance of Tesla's non-automotive businesses, particularly Tesla Energy, for future valuation. Potter stated that Tesla's automotive segment alone could be valued at $135 per share, assuming sales of over 15 million vehicles and a mid-teens EBIT margin. However, he believes Tesla's energy business, especially battery sales, will significantly contribute to revenue and profit growth, expecting it to double its revenue contribution to 12% by 2025 and potentially generate 10 times the revenue of Cybertrucks by the 2030s.
February 06, 2024 | 4:56 am
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Tesla's valuation and future growth prospects are increasingly tied to its energy business, according to Piper Sandler analyst Alexander Potter. Despite a reduced price target, the emphasis on Tesla Energy's potential to drive revenue and profit growth presents a diversified growth narrative beyond just electric vehicles.
The analysis by Piper Sandler suggests that Tesla's valuation cannot solely rely on its automotive segment. The emphasis on Tesla Energy as a significant growth driver, with expectations of doubling its revenue contribution by 2025 and generating substantial profits, indicates a positive outlook for Tesla's diversified business model. This diversification could mitigate risks associated with the automotive sector and provide a more stable growth trajectory, potentially leading to a positive short-term impact on Tesla's stock.
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