For a tech empire like CEO Elon Musk’s, the company sells more than just cars to the public, but inspires “real passion” with a legacy that could follow that of the Apple iPhone evolution.
Keep in mind, “Apple succeeded because the world shifted from PCs to smartphones and Apple had the best product,” explains the analyst, who sees a connection to be made to Tesla’s asset that he champions above the rest of its rivals: “Similarly, we believe there is a secular shift today from internal combustion engines to electric vehicles and we think Tesla has the best product.”
What kind of gains could this spell out for Tesla? Shah wagers, “We believe a strong affinity for the Tesla brand will translate into unprecedented revenue growth and strong cash flows.”
After test driving the mass-market Model 3, Shah has walked away all the more confident on Tesla’s shiny future: “We aren’t professional car reviewers, but we walked away believing that Tesla will be selling as many cars as it can produce for a long time.”
After testing out the wheels on the Model 3 for a ride, Shah expresses excitement in the kind of target market prospect that could be even bigger than competitors BM3, Mercedes, and Audi. To put it simply, to take the Model 3 for a spin was “exhilarating” for Shah.
“Importantly, the technology integration is a clear advantage. Model 3’s immersive central display experience is as close as we’ve seen to smartphone/automobile integration. We view this as a critical point; we think that legacy automakers have very much underperformed on keeping pace with the onboard utility of a smartphone, through a period in which the smartphone has become a critical part of day-to-day life,” concludes the analyst, enticed by the revenue opportunity waiting in the wings.
As such, the analyst maintains a Buy rating on TSLA stock with a price target of $500, which represents a 65% increase from where the stock is currently trading. (To watch Shah’s track record, click here)
Musk’s brainchild has analysts fiercely undecided between the bulls and the bears, considering TipRanks analytics exhibit TSLA as a Hold. Out of 20 analysts polled by TipRanks in the last 3 months, 4 are bullish on Tesla stock, 8 remain sidelined, and 8 are bearish on the stock. With a return potential of nearly 3%, the stock’s consensus target price stands at $310.93.