Why This Analyst Thinks Tesla's Growth Can 'Shock Wall Street' For Several Years

Zinger Key Points
  • Hedge fund Worm Capital expects Tesla stock to generate over 10 times return by 2030
  • If call options such as Robotaxi and AI were included, the upside potential could be profound

Tesla Inc. TSLA stock is the best bet for long-term-focused investors, according to an analyst at hedge fund Worm Capital.

Tesla Investors In For Superlative Returns: Tesla will likely grow production at least by 50%, on average, through 2030 as opposed to the less than 20% annualized Wall Street forecasts now, Eric Markowitz, Director of Research and Partner at Worm said.

By year-end 2030, the company will have the potential to hit the 20-million-unit production rate, the analyst estimates. He models over 40% gross margins at scale.

The analyst sees the company's operating, gross and net margins expanding at a healthy rate over time.

Markovitz expects returns from Tesla shares to be at least ten times by 2030 and potentially higher. The optimistic view is premised on the company's accelerated growth, expanding margins, new products, and recurring software revenue.

Related Link: Tesla Stock Split And More: What Retail Investors Want To Know From Elon Musk And Team On Wednesday's Quarterly Call

Massive Market Opportunity: Tesla's four distinct businesses, namely consumer transport, commercial transport, energy and real-world AI/Autonomy, represent $15 trillion in addressable markets, Markowitz said.

"Tesla's consumer vehicles are the entry point to develop necessary cash flows to build out new and bigger business lines in the coming years," the analyst said.

Tesla Supercharger, according to the analyst, will potentially be a spin-out from Tesla by 2030.

Opportunities, including Robotaxi network and other expanded use cases of AI integrated into new business lines, are not included in the valuation framework, the analyst said.

"We think Tesla's growth could shock Wall Street for several years," the analyst said.

Tesla shares are up 2.42% at $1,028.62, according to Benzinga Pro.

 

Posted In: electric vehiclesEric MarkowitzWorm CapitalAnalyst ColorLong IdeasTop StoriesAnalyst RatingsTrading Ideas