Just How High Could TSLA Stock Soar?
Tesla Motors Inc (NASDAQ:TSLA) and TSLA stock got a ringing endorsement on Friday from billionaire buy-and-hold investor, Ron Baron. He told CNBC he believes he can make 30 to 50 times his money on his investment in Tesla within the next 15 years.
Baron went on to call Tesla “maybe the most interesting” company he’s ever invested in over his 46-year career. (Source: “Billionaire Ron Baron: I could make 30-50 times my money on Tesla over next 15 years,” CNBC, November 4, 2016.)
Baron followed up his support of Tesla by reminding investors that it’s a risky venture. After all, Tesla has only ever been profitable in two quarters since going public in 2010. However, its most recent quarter came in profitable and CEO Elon Musk believes that Q4 of 2016 will follow suit. (Source: “Tesla shares soar after posting second quarterly profit ever,” CNBC, October 26, 2016.)
Tesla reported earnings of $0.71 a share on an adjusted basis in the third quarter on $2.3 billion in revenue. Reuters’ consensus estimate composed by analysts expected a loss of $0.54 per share on $1.98 billion in revenue.
The shares jumped accordingly following the promising third-quarter numbers, but TSLA stock will face challenges going forward, like proving it can make its vehicles profitably, Baron told CNBC.
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TSLA stock has soared in recent years, after initially remaining quite flat following its IPO. That all changed in 2013 when the share price rose from $34.40 to its current price of $189.70. This represents an almost 600% increase over a three-year span. TSLA stock has definitely been a winner ever since that climb, maintaining relative stability since the surge.
If Baron is right and you can take a $189.70 value stock and see it boom to 10, 20, or even 30 times the fold price range Baron believes it could reach in 15 years, that’s certainly a stock worth getting in on. But you have to believe tesla stock will excel to those heights.
Investors have to choose whether or not they believe Tesla can change itself from being “the car of the future” to “the car of today.”