It was a wild ride for Tesla (TSLA) shareholders yesterday, as the stock reached all-time highs of nearly $1,800 in early trading, only to fall and close down 3.08% at $1,497.06.
The volatile day was the same day that Piper Sandler analyst Alex Potter revised his price target for the automaker by nearly 150%, from $939 to $2,322 per share.
In a note to investors, Potter cites the reason for his optimistic view of the company is due to Tesla’s position to continue to dominate the market, as well as their potential as a software company as much as an automaker.
“In our view, Tesla is the most consequential company in the mobility ecosystem, and this is unlikely to change in the next decade. We are increasing our price target to $2,322 after adjusting our DCF model to reflect faster-than-expected share gains and, more importantly, a detailed analysis of Tesla’s software opportunity.“
Along with the revised price target, Piper Sandler also adjusted their 2020 delivery estimate to 487,000, slightly lower than Tesla’s guidance for the year.
That number is particularly important because they see Tesla as still having a chance to get close to their target, despite the 2-month shutdown of the Fremont factory due to the coronavirus pandemic.
This is something Drive Tesla also thinks can happen based on our analysis last week.
Potter’s model also predicts that in 2025, Tesla will delivery a staggering 3.95 million vehicles around the world.