Gene Munster Believes Tesla Inc (TSLA) Long-Term Story Poised to Inspire Investor Optimism for the Next 3 Years

Loup Ventures' Gene Munster is positive on Tesla's opportunity in an "untapped" market.


Tesla Inc (NASDAQ:TSLA) just took a leap in boosting its addressable market to the tune of likely 15% to 20% after adding the introduction of an electric semi truck to its bigger picture. Additionally, the addressable market takes another probable 1% jump on back of the surprising reveal of a new Roadster.

From the eyes of expert research analyst Gene Munster – spilling tech insights from his research-driven, venture capital firm Loup Ventures – even “more importantly” than broadening its addressable market is the encouraging rise in investor sentiment that should follow suit. This marks an “untapped opportunity” in the trucking playing field for the electric car giant, and one that could keep investor optimism fueled and fired up for the upcoming few years. On a side note, Munster cannot help cheering, “Steve Jobs would have been proud” of Musk’s strategy to exhibit two trucks with an unexpected bombshell: The Roadster.

“This optimism is critical to allowing the company to continue to tap the debt and equity markets for the capital needed to enable Tesla to advance its mission of accelerating the globe’s adoption of renewable energy, disrupting the auto and energy industries along the way,” writes Munster.

With regard to the new truck, the analyst notes the “biggest unanswered question of the night” boils down to pricing, with Munster predicting that by 2019, or more likely 2020 following “inevitable delays,” the smaller truck will carry a price tag circling $225,000 in value with the bigger truck tackling a price of roughly $275,000. By 2025, both the electric car giant’s top and “presumably” bottom line will therefore see a lift of around 15% to 20%, by Munster’s calculations.

The Roadster is anticipated to hit the market in three years, or by 2021 at the latest with delays, and Munster anticipates Tesla could be carving out 25% market share of the exotic car market, which could realize almost $1 billion annually in revenue for Musk’s empire. By 2023, this would translate to a little past 1% of total revenue for the company.

Munster explains, “Musk’s comment that the point of building the Roadster was to ‘give a hardcore smackdown to gasoline cars’ highlights the fact that Roadster is more about making a statement to the industry around the performance of EVs (0-60 in 1.9 seconds with a 620 range), and less about making money. Mission accomplished on that front.”

Ultimately, “The Model 3 production ramp remains at the center of the Tesla story for the next two years, but the long term story took a step forward,” contends the research analyst.

Compared to Munster’s more bullish take on the electric car empire, not all of Wall Street carries such confidence, considering TipRanks analytics demonstrate TSLA as a Hold. Based on 21 analysts polled by TipRanks in the last 3 months, 5 rate a Buy on Tesla stock, 8 maintain a Hold, while 8 issue a Sell on the stock. The 12-month average price target stands at $320.27, marking a nearly 2% upside from where the stock is currently trading.

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