Apple is on the top of the world, says the research team at Loup Ventures, literally the leading global company boasting a close to $770 billion market cap, which is certainly quite an accomplishment. But is the Loup Ventures team correct in calling CEO Elon Musk’s brainchild Tesla Inc (NASDAQ:TSLA) the Apple of the car universe?
True, the electric car giant has a repute as one of the automaker world kings, and a near $55 billion market cap at play. But from the eyes of the Loup team, it’s a story that’s “just getting started.”
When considering Tesla’s power, a lot of the exhilaration lies in its brand- much like it does for Apple. “Tesla owners love their Teslas,” argue the analysts, who point out that a Consumer Reports survey finds 91% of Tesla owners are so satisfied they would absolutely stay loyal to the brand. It is the best of the satisfaction rating of all the competitors, which likewise stands next to Apple’s 97% rate of consumer satisfaction for those eager iPhone enthusiasts.
Moreover, Loup Ventures cites a “less tangible cool factor” that elevates Tesla above the rest in the arena, highlighting, “Tesla has built a brand around being a different kind of automaker […] all while squarely placing itself in the conversation with BMW as one of the best-engineered cars in the world. Tesla has established itself as an aspirational brand by taking a new approach to the car market.”
Every empire needs a visionary to spearhead the dawn of a new era, and much like Steve Jobs trail-blazed for Apple, Elon Musk is another innovator of his time, but one with a superhero mentality wanting “to save the world.”
For the Loup Ventures team, “The only question may be if his desire to save humanity ultimately pulls him in too many directions.” Certainly a “wild card” element that could make investors apprehensive around Musk’s ambitious visions, yet the entrepreneur extraordinaire has proved himself capable. As such, the analysts explain, “We think the risk of this is real, but low, as Musk has shown an ability to surround himself with great talent, enabling him to better leverage his own time.”
The best description of Musk’s giant is that “Tesla is not a car company,” but rather, “It’s an operating system for sustainable energy that combines a powerful brand, a visionary founder, integrated hardware and software, and a halo effect all with the purpose of transforming a combination of large markets,” the analysts underscore, contending that ultimately “TSLA might be the next AAPL, but Tesla will forge its own path and the world will be better for it.”
While Loup is upbeat on Tesla’s road approaching the next ten years, calling the giant “the next Apple,” it looks like the rest of the Street is not so sure. TipRanks analytics exhibit TSLA as a Hold. Based on 18 analysts polled by TipRanks in the last 3 months, 6 rate a Buy on Tesla stock, 6 maintain a Hold, while 6 issue a Sell. The 12-month average price target stands at $276.92, marking a nearly 14% downside from where the stock is currently trading.