Over the last 12 months the Tesla share price has been as low as $176.99 and as high as $507.50 which we see today. The shares smashed through the $500 barrier with an array of analysts increasing their price targets and talking up the company. To put this into perspective, Tesla is now valued at approaching $100 billion which is more than the combined value of Ford and General Motors. Indeed, this is 64 times the value of Aston Martin. So what is happening?
Global delivery figures
Last Friday Tesla confirmed it had delivered 367,500 electric vehicles in 2019. This record-breaking figure is up 50% on the previous year with around 112,000 vehicles delivered in the final quarter of 2019 alone. We also know that production numbers are up having grown by 10% between the third and fourth quarters of 2019. This comes at a time when the company is also ramping up business in China having recently delivered its first Chinese-produced vehicle. We can only assume that analysts have been caught somewhat offguard by the company’s recent troubles and failed to recognise the huge increase in delivery numbers.
Is there more to come?
Analyst Oppenheimer recently increased its Tesla share price target to $600 which leaves scope for a further 20% increase on the current share price. While other analysts have been increasing their price target, many are still under the $500 level and seem to be left behind in the company’s wake. In reality, Elon Musk has promised ever increasing delivery numbers for some years now, 2019 is perhaps the year when his predictions came true?
The recent electric truck launch was a disaster, creating the type of PR which can cost companies heavily on the reputation front. However, Tesla is a company like no other, a company which can turn around disastrous PR to keep the operation in the headlines and refocus on the main business. Let’s not forget, Elon Musk was mocked by many analysts when he indicated a willingness to make a potential bid for the company at around $420 a share. On the current company valuation he would have made a circa 20% gain on his takeout price!
Are investors waiting for it to go wrong?
There has always been a sense of uncertainty and concern regarding Tesla, much of which has revolved around the flamboyant founder. He has always “enjoyed” a fractious relationship with analysts and has often been dismissive of investors asking questions. Some suggest he is focused while others suggest he is an entrepreneur unable and unwilling to listen to others. However, at this moment in time it is difficult to criticise the man. Much of what he predicted is starting to come true, analysts are starting to warm to him again and the share price is following suit.
Summary
There have been constant concerns about the financial strength of Tesla, but even after the monumental rise of late there is no indication of any fundraising in the offing. Rather bizarrely, especially bearing in mind recent volatility and criticism, taking advantage of the recent share price rise to raise funds may not be such a bad thing.