Tesla Motors Inc (NASDAQ:TSLA) share price has the potential to breach the $500 mark, believes a report on Seeking Alpha from Green Energy Addict. According to the author, many events concerning Tesla are happening that could bring the share price closer to the milestone.
Analysts underestimating earnings potential of Tesla
The author believes that most of the analysts are underestimating the revenue and earnings figures of the company for the fourth quarter. Consensus estimate for Tesla is earnings of $0.18 on revenues of $657 million. Previously, Tesla Motors Inc (NASDAQ:TSLA) revealed that it delivered 6,900 vehicles, and expects the revenue per vehicle to be similar to the third quarter, which puts the revenue at $759 million.
ValueWalk's Raul Panganiban interviews Joseph Cioffi, Author of Credit Chronometer and Partner at Davis + Gilbert where he is Chair of the Insolvency, Creditor’s Rights & Financial Products Practice Group. In the interview, we discuss the findings of the 3rd Annual report. Q2 2021 hedge fund letters, conferences and more The following is a computer Read More
Tesla’s analysts estimate for 2014 EPS is steadily moving upwards, and is now at $1.59 from $1.52 previously.
Events boosting the demand
Recently, Tesla Motors Inc (NASDAQ:TSLA) completed its coast to coast driving in record time. The drive is a brilliant marketing move from Tesla reflecting the vehicle’s safety, reliability, ease, comfort, and speed. Even under adverse conditions, the crew was able to finish the drive in record time. This trip will certainly boost the demand for Tesla vehicles, according to the author.
On Friday, a tweet from Elon Musk, the CEO of Tesla Motors Inc (NASDAQ:TSLA) undoubtedly established the growing popularity of Tesla vehicles. The tweet was about a report that claimed used Tesla cars are commanding a premium over the new ones. “Houses are supposed to appreciate over time though. Vehicles not so much,” according to the author.
Not to forget ‘Wild cards’
Achieving the $500 mark would require some optimism and off course hard work on the part of the company. According to the author, it is very difficult to model a company like Tesla Motors Inc (NASDAQ:TSLA) as there are too many “unknowns.” However, to get to the $500 mark, the company probably needs to double its production in the future compared to 2014, which would result in double earnings. Also, the electronic vehicle maker must work on lowering its variable cost structure, which it has been doing since 2013. Tesla should leverage its overhead, and continue to invest in R&D, and build more supercharger stations, preferably at an increased pace, but “maintaining the same bottom line earnings,”
Apart from these, other factors contributing will surely be ‘wild cards’ or unknown events. The company has been testing non-vehicle revenue streams as it improves on its battery technology and production. “Musk and his crew continue to innovate in a way that never fails to positively shock the street,” believes the author.