Tesla Motors Inc (TSLA) Is A ‘Category Creator,’ Says Analyst

To say that Tesla Motors Inc (NASDAQ:TSLA) has had a wonderful week would be an understatement. Heck, to say that shares of the electric vehicle Apple-wanna-be have had an amazing week would be doing the stock a disservice. Since Wednesday, Tesla shares are up over 38% on the back of a massive earnings and revenue beat, and as it was reported on Insider Monkey yesterday, “EPS came in at $0.12. The nine earnings estimates compiled by S&P Capital IQ averaged $0.04 per share.”

Equally as important, talk of a quick-charging supercharger service, literally the best score ever by Consumer Reports for its Model S, speculation over self-driving technology, anticipation of Tesla Motors Inc (NASDAQ:TSLA)’s Model X, thoughts of a lower-cost $30K electric car, and even reports of a 1,600km car have driven the bulls wild. As ridiculously high short ratio of 49.20% (as of April, 15th) may have helped shares move higher as well, due to a commonly known, but tough to pinpoint, phenomenon known as a “short squeeze.”

With all of that in mind, it’s still important to ask the question: how high can Tesla shares go? At their current trading price of $76.76, it’s difficult to quantify the stock’s massive move, but some firms have price targets more than twice this level. Some investors may be seeing the similarities with innovative tech titans like Google Inc (NASDAQ:GOOG) or Apple Inc. (NASDAQ:AAPL), but in comparison to its peers in the electric auto space, Tesla Motors Inc (NASDAQ:TSLA) may be even further along.

Still, some may think that the market might’ve gotten a bit “crazy” on the valuation side, according to a recent segment on CNBC’s Street Signs. One intriguing metric the program brought to the table was a pseudo-market cap per car expected to be sold multiple, that essentially valued Tesla Motors Inc (NASDAQ:TSLA) at around 17 times the value of Ford Motor Company (NYSE:F) and Toyota Motor Corporation (ADR) (NYSE:TM).

In addition, Ben Kallo of Robert W. Baird, says that Tesla is a “category creator,” mentioning that the stock can live up to its growth potential, adding that “when that brand’s been made, investors are willing to attribute value to that.” When asked of how it compared to Apple’s potential in the past, Kallo voices the Street’s primary bullish thesis behind Tesla: that there’s “room to grow with new models […] the Model X, which is a crossover vehicle, then Gen 3 […] which is going to be a consumer vehicle, down at the $30,000 level.”

Kallo’s price target on Tesla is $70 as of Thursday, which, as we see today, is below what shares are currently trading at. Still, it’s usually a mistake to bet against any stock that has the momentum like Tesla does at the moment, and shorting a stock for valuation concerns almost never works in one’s favor. Just ask anyone who tried to short Netflix, Inc. (NASDAQ:NFLX) earlier this year.

See the full CNBC video:

Disclosure: none