Our $1000+ Tesla Target Was Way Too Low

We have a Tesla (Nasdaq: TSLA) 2019 stock price target of $1,343 so when we heard Ark Invest’s $4,000 target we thought we must be just way too low.

Gross Margins Jumping

If you backed into the numbers for Q2 you saw S&X gross margins jumped to 37% or so, up 1100 basis points from Q1. Bears made up stories why that’s bad, right?

As Model 3 gross margins go to 15-20% this year and 25-30% next year (all stated by Tesla on the Q1 and Q2 earnings calls) you can get much higher earnings.

And you can start believing Tesla on their targets because those S&X gross margins were the real deal. It’s happening.

Yes, some of it’s on the come but S&X gross margins were too big.

Earnings Inflection Of The Century 

We do a simple trajectory analysis to see where the numbers are going. We’ve been doing it for 25 years. Tesla’s story is about to hit serious earnings inflection. There aren’t that many companies doing what Tesla’s about to do with this earnings inflection. We’re looking for them and there are not that many out there. And earnings are the primary driver for individual stock price performance.

Bears Way Too Bearish

I can’t believe how bearish everybody is. I think everybody’s so stuck in the mud being bearish, emotional and negative that they can’t honestly look at that Q2 S&X gross margin jump which tells you, uh oh, this is happening. Sorry shorts.

$420 For A Song

$420 is taking Tesla for a song. It’s way too cheap. I hope they don’t get away with it.

Would you give Tesla a 50 PE for earning our $26.87 in 2019? If so you get a $1,343 stock price. The sell-side’s under $3.00 for next year. Way off. No wonder Musk’s trying to nab this one on the cheap. Everyone’s missing it.

So yes, $1,000 in 1 year and Ark’s $4,000 in 10 years. That would be a 40% return a year. Not bad, right? But Musk wants much more of that upside to himself. Can you blame him?