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Tesla (TSLA) stock’s meteoric rise to US$1,389.86 per share was explained by Gene Munster from Loup Ventures in an interview with CNBC’s Fast Money. TSLA's market cap went up to US$257.78 billion after gaining 44.39% in the past month. As of this writing, Tesla stock is trading at US$1.400.04, a .73% rise, before hours. It appears that TSLA is gearing up for another record high.
TSLA is performing better than 90% of stocks in the S&P 500, according to CNBC’s Fast Money host. Loup Ventures Gene Munster appeared on the segment to give investors, analysts, etc. some perspective on Tesla’s breakout.
He talked about the scarcity value in the EV auto market and how legacy automakers weren’t really releasing electric vehicles that made an impact in terms of marketshare. “It’s a very clear decision for consumers,” Munster said, noting that Tesla had about 80 percent market share in the battery electric vehicle segment.
Day traders are charged up on EV stocks, with Tesla hitting another all-time high yet again. @LoupVentures founder Gene Munster breaks down the surge and what’s next for the EV market $TSLA pic.twitter.com/HKfZqFHi20
— CNBC's Fast Money (@CNBCFastMoney) July 7, 2020
“We can also fast-forward to 5 to 10 years from now [when] there will be much more electric cars. About 3% of total cars so globally—today—are electric but undoubtedly that number will go to 100% at some point in the future. It’s simply a better way to move around and Tesla has an advantage,” he added.
He sympathized with the people who might be confused about TSLA's seemingly rapid rise. “And I think when look at Tesla’s current 260 billion-dollar market cap, look at it relative to the rest of the auto industry, it’s hard to fathom why it could go higher,” Munster said.
To help people understand the drive behind Tesla stock’s meteoric rise, Loup Ventures’s managing partner tried to shift their perspectives of the company. “But I think, that the perspective about this as a growth company take away the previous view of this is an auto company. And look at this as a perspective of what the potential growth rate is, the scarcity value, this company could grow at 30 or 40 percent in the next 5 plus years.
Tesla (TSLA) Stock Breakout Forecasted By ARK Invest's Cathie Wood Back In 2019 https://t.co/t6dtwTnjQD pic.twitter.com/oxDDypAN96
— Tesmanian.com (@Tesmanian_com) July 8, 2020
“If it grows at 40% for the next 5 years, that’s 200 billion in revenue. And that would imply at a 20% operating margin, which with their software, they could presumably could get there much more than any auto company.
So there not an analog there. But that’s 40 billion in operating income and you can start to scale together a multiple on that. You could build a case that this name could go much higher,” Munster explained.
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Ma. Claribelle Deveza holds zero share of Tesla, Inc., and currently (at the time of this article's publishing) holds zero options or securities in Tesla Inc. and/or its affiliates.
About the Author
Ma. Claribelle Deveza
Longtime writer and news/book editor. Writing about Tesla allows me to contribute something good to the world, while doing something I love.
