Tesla Motors Inc. (TSLA) Impressive Growth Trajectory Since 2013


Tesla Motors Inc. (NASDAQ:TSLA) Growth trajectory goes without saying, has been impressive after increasing its production estimates from approximately 20,000 vehicles last year to this year’s 35,000.Last year, Deutsche Bank AG (USA) (NYSE:DB)’s analyst, Dan Galves, had a price target of $160 on Tesla, as he said during an interview on CNBC. The company has surpassed this target and is now trading at the mid $250 mark. The growth trajectory that Tesla has shown continues to be the most-attractive feature when compared to its rival General Motors Company (NYSE:GM).

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Galves had highlighted back in 2013 in an interview on CNBC that the company had a strong advantage in the electric vehicles segment something that the company has clearly demonstrated this year. The long-term sustainability of the advantage looks solid, taking into consideration the expansion that the company is undertaking as well as the rolling out into key markets like China.

 “[…] We have a target price of $160 and you know we feel like the company has a strong advantage in electric vehicles and that’s likely to be sustained over the long-term. So we see a lot of volume growth over the next few years and profitability being really strong,” said Mr. Galves.

Tesla Motors Inc. (NASDAQ:TSLA) has already increased its production capacity and is in line to construct a mega battery factory that should be of benefit to it in the long run. Increased volume sales essentially outline’s its profitability margins that looks’ set to improve as the years go by.

Galves had also said that the company could double its share price in a matter of three to four years based on earnings and volumes, mainly as a result of new cheaper models. The company has been growing tremendously both on share price as well as their production capacities that continue to meet the growing demand.

“[..] I mean our price target is based on earnings and volumes that are unlikely to come until near the end of the decade, once Tesla brings out their next generation vehicle, which is a lower price vehicle. So you know we base our valuation target on earnings in three- or four years from now. We think that this company can do about $14 of EPS on 200,000 units near the end of the decade,” said Mr. Galves.

Tesla Motors Inc. (NASDAQ:TSLA) as of August, last year, had a market cap that was only 25% of General Motors Company (NYSE:GM)’s thus buying the latter was no ‘brainer’ considering Tesla was only selling about 20,000 units, compared to millions by GM. Galves at the time downplayed this move defending Tesla growth and profit margins that continue to outperform the industry average, as well as those of GM.

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