Tesla just reached a $100 billion market capitalization, as the shares have been on a torrid run of late. But the number that rally is all about — deliveries — is one of the major keys investors need to be watchful of.
The stock rose 6.4% to $582 a share Wednesday, with the market cap now standing at $104.9 billion. The shares are up 40% to start 2020. Analysts have been raising price targets on the stock in droves as the company has turned profitable, proved it can execute on production and deliveries and is investing in its China gigafactory.
Analysts at Wedbush Securities raised their price target to $550 from $270 Wednesday. “We believe hitting the important 500,000 delivery threshold for fiscal year 2020 is well within reach,” the analysts wrote. They believe “based on our Chinese demand scenario analysis that Tesla has the potential to hit the elusive and “game changing” 1 million overall delivery vehicle mark potentially two years ahead of our original 2024 projections, given this current trajectory aiming now at 2022,” the analysts wrote. Tesla will have to prove it’s garnering demand in China, which will be a “major swing factor on the stock” in the near-term.
Tuesday, NewStreet Research raised its price target to $800 a share, saying it expects Tesla to hit between 2 million and 3 million deliveries in 2025, an aggressive estimate compared to most analysts’ estimates.
Delivery growth is expected to fall in a range of about 20% to 30% per year for the next servile years. The stock trades at 88 times next year’s earnings. Tesla must execute and investors will be eyeing deliveries now more than ever.
Catch up on the Latest Webinars on TheStreet!