As pessimistic forecasts continue for Tesla’s stock price, Cathie Wood has expressed a contrary opinion. She believes that Tesla’s autonomous taxi will exert innovative influence.
According to industry insiders on the 4th, Wood stated in a recent interview with the media that “Tesla’s target stock price will remain at $2000 per share until 2027,” adding, “This is a tenfold increase from the base scenario.”
Despite Tesla’s recent poor performance, Wood predicts a resurgence in growth within the next two years due to the emergence of an autonomous taxi platform. She also forecasts that the electric vehicle business will show higher growth in the next five years and dominate most of the market.
Wood emphasized, “The autonomous taxi network will re-accelerate Tesla’s growth and significantly increase its margins,” and “the robot taxi platform, operated by a Service-based Software (SaaS) model, will provide significant potential for growth and profitability.”
Wood is a prominent Tesla supporter and an early investor in Tesla. ARK Invest, where Wood serves as CEO and portfolio manager, aggressively bought Tesla shares when pessimism about Tesla and electric cars peaked last year.
However, despite Wood’s positive outlook, there is also a lot of skepticism about Tesla in the market. This is due to the claim that BYD, Tesla’s biggest competitor, proliferates amidst the sluggish electric vehicle market this year.
Last year’s fourth-quarter earnings announcement added fuel to this claim. Tesla’s fourth-quarter revenue and earnings per share (EPS) again fell short of market expectations following the third quarter. Revenue increased by only 3% compared to a year ago, marking the lowest growth rate in the past three years. If we only consider the automotive sector, the growth rate was a mere 1%.
The outlook for this year is not bright either. Tesla has already predicted that this year’s auto sales growth rate will be lower than last year. This is due to the impact on this year’s profitability as they focus on developing a new affordable car set to be produced in the second half of next year.
Financial companies are also continually lowering their target prices for Tesla. Barclays has reduced Tesla’s target price from $250 to $225, RBC analysts from $300 to $297, and Canaccord Genuity from $267 to $234.
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