Tesla Stock Forecast: Will TSLA Surpass ARK’s $3,000 Price Prediction?

Tesla stock (NASDAQ: TSLA) has continued its stellar run over the past year as the EV first mover continues to dominate the growing EV market in North America. Tesla’s stock price has risen 90.61% over the past 12 months, one of TSLA’s best performing trading periods since its initial listing in 2010. More recently, Tesla stock has been on a bull run surpassing its $1 Trillion valuation milestone. This article will dive into the Tesla Stock Forecast, and evaluate ARK’s $3,000 price prediction on Tesla Stock.

Cathie Wood comments on Tesla Stock and the Apple Autonomous EV

Wallstreet Remains Upbeat On The Tesla Stock Forecast

Firstly, valuations from analysts at large financial institutions can provide investors deeper insight into the current “smart money” consensus on Tesla Stock. For coverage in November, the average price target on Tesla stock is $1,300 suggesting Wallstreet sees further upside despite Tesla’s valuation.

Wallstreet remains somewhat divided on Tesla’s future, with some bull cases suggesting Tesla Stock could reach $1,800 while other institutions remain concerned on the companies valuation.

With such a large differential between price targets, analysing recent targets from institutions will shed more light on the Tesla Stock Forecast.

Wedbush analyst Daniel Ives, is renowned as one of Tesla’s biggest bulls. Ives recently raised the firm’s price target on Tesla Stock to $1,400. The analyst re-affirmed confidence in Tesla’s first mover advantage, with a $5 Trillion market opportunity over the next decade.

Interestingly, Daniel Ives also highlighted an important point regarding EV adoption in the rental car space. Following the companies Hertz deal, Ives sees Tesla adding 200K-300K more deliveries annually as more rental car agencies following Hertz’s lead.

Looking at the long term Tesla Stock Forecast for 2025 and beyond, Morgan Stanely analyst Adam Jonas sees 8.1 Million Tesla vehicles delivered by 2030. Although Jonas is a bull, this target is still considered conservative compared to Tesla’s forecast, which is 20 Million vehicles delivered annually by 2030. Jonas currently has a $1,200 target on Tesla Stock.

Ark Invest Sets $3,000 Price Prediction For Tesla Stock By 2025

Earlier this year, analyst Tasha Keeney at Ark Invest released the firms updated price target on Tesla stock. Ark have set a $3,000 price prediction for 2025 which analyses both Bullish and Bearish scenarios. Ark invest is run by infamous Tesla Bull, Cathie Woods.

In Ark’s valuation model, they noted a Bull case valuation at $4,000 a share and a bearish target of $1,500 in the year 2025. In the Bull case thesis, Tesla will sell 10 million vehicles in 2025 whilst its bear case suggests 5 million vehicles sold.

ARK had also priced in the potential of Tesla’s insurance business over the next 5 years. With Tesla vehicles collecting real-time data, the company can underwrite the insurance risk of their vehicles opening a door for Insurance products.

ARK forecasts the company will turn over $23 Billion in revenue annually from its insurance products alone by 2025 (Bear Case Scenario).

Overall, ARK is known as a long standing Bull of Tesla stock and their $3,000 price prediction for 2025 solidifies the firms confidence in their Tesla Stock Forecast.

What this means for Tesla investors?

The general consensus across the board of analysts is moderately bullish, with institutional price targets for this month suggesting an average Buy rating.

However, it’s important to note over the past 6 months, a fair share of both institutions and investors including Michael Burry have rang the alarms on Tesla’s valuation.

It is important to understand why Tesla is trading at high multiples, because it does not necessarily mean Tesla Stock will crash. It generally means that investors are willing to pay more now for Tesla stock, for the benefits they see in the Tesla Stock Forecast.

Whether or not this justifies its multiples has been an ongoing debate over the past 5-10 years. It ultimately comes down to the type of investor and whether the future cash flows exceed the companies current valuation or not.

Tesla Beats Quarterly Expectations Once Again

Tesla stock (NASDAQ:TSLA) gained significant momentum following the companies strong Q3 performance. In particular, Tesla shattered their previous quarterly delivery record with 241,391 vehicles being sold. 

As a result, the company also broke its previous revenue record, generating $13.57 Billion for the quarter. The strong Q3 performance alongside the companies deal with Hertz to deliver 100,000 vehicles, saw investors begin a buying frenzy on Tesla stock.

Revenue Forecasts For Tesla in 2022

Analysts predict Tesla’s annual revenue to increase on average by 62% for 2021. The revenue forecasts expects Tesla to generate on average $51.11 Billion in 2021.

In addition, the average revenue forecast for 2022 is $70 Billion. The 2022 revenue forecasts suggest strong financial performance for Tesla as the EV market continues to expand across the globe. With Tesla’s first mover advantage and high performance vehicles, the company holds a significant advantage in the North American and European market.

Looking forward, ARK’s model as discussed above predicts Tesla to generate $507 Billion by 2025. This translates an EBITDA of $176 Billion for the same year. See ARK’s full revenue model here.

Barcelona, Spain. March 2018: Tesla inc cars flagship store near Passeig de Gracia luxury shopping street with Tesla logo and an electric cars model S and X inside

What’s In The Pipeline For Tesla

  • Tesla plans to add at least one new service center every week in 2021. Tesla will continue to build charging stations to meet the increasing demand for the vehicles.
  • The company expects to grow deliveries by 50% or more over the next few years. In addition, Tesla will begin deliveries of Model Y vehicles made in Berlin in 2021.
  • Production in Fremont to reach full capacity in early 2021 according to Tesla.

The Bottom Line: Tesla Stock Forecast

In summary, the Tesla Stock Forecast continues to divide the bulls and the bears with its future outlook in 2021 through to 2025.

The bullish sentiment from analysts in November is a positive sign for long term shareholders. In addition, the positive revenue forecasts and continued delivery growth from Tesla is not to be underestimated. Interestingly, as noted by Daniel Ives of Wedbush, the Hertz rental deal with Tesla could add serious delivery growth if other rentals follow suite.

However, investors should tread with caution as the EV industry has seen a fair amount of market volatility as of late. The bears including Michael Burry see the valuation of Tesla unjustifiable even considering the potential of the EV market. We will continue to update the Tesla Stock Forecast as we move into 2022.

Follow us on Google News to see more like the Tesla Stock Forecast 2025

Follow us on Google News here to get minute-by-minute updates on when we post on any device via the Google News App. You can also subscribe to notifications on Desktop by clicking the red notification bell in the bottom right corner. 

The content above is strictly for informational purposes only and is not financial advice nor does it constitute a recommendation. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you. 

Looking to start trading in Australia or the UK?

Do you live in Australia or the United Kingdom and looking to invest in the US market? Good news! We’ve partnered with Stake. Trade 4,500+ US stocks and ETFs with $0 brokerage and no fx fees per trade. Use our code “YIG” to receive a free stock when funding your new account.

In addition, Stake is one of the leading US trading platforms for Australian and UK investors. Click hereto start trading US stocks with a streamline trading experience. Lastly, for more information on our referral program and how it works click here.