The electric car maker is an "extreme growth story" that cannot be valued in the same way large automakers are, said Evercore ISI analyst George Galliers said in a research note.
Following the buildout of the Model 3, Tesla has the potential to achieve sustainable gross margins comparable to those of high-end German auto brands, while growing more like a rapidly advancing Chinese automaker, he said.
The rates at which Tesla's top-line metrics are growing are unrivaled,
"To put Tesla's growth in context,"
At the same time, "Tesla's unadjusted gross margin of 25 percent last year is impressive by any standard," he said.
Indeed, Tesla is burning massive amounts of cash now. In the short term, Tesla is spending a lot on the Model 3.
After the Model 3 buildout,
He added that an EBIT margin range of roughly 12 percent to 15 percent is achievable in the long term, once growth normalizes and costs begin to flatten. "In other words," he said, "Tesla has the potential to achieve margins that are double those of US peers today."