Tesla is defying expectations.
Shares of the electric-car maker have been on fire this week, skyrocketing nearly 14% on Tuesday one day after jumping nearly 20%, its biggest one-day climb in six years. That brings the stock's year-to-date gains to a whopping 112% on a market cap of nearly $60 billion.
Wall Street was impressed, if not speechless. Here's what five market professionals, including billionaire investor Ron Baron, said about the surge:
Baron, who is CEO, chief investment officer and portfolio manager at Baron Capital, said this is just Tesla playing "catch-up":
"This year, Tesla's going to do somewhere around $32 billion in revenues, and I guess that they're going to do $100 billion in revenues within four years. And I think they have potential for $1 trillion in revenues within 10 years. So, basically, you're looking at the very start of what's going to happen with Tesla. This could be one of the largest companies in the whole world."
Craig Irwin, senior research analyst at Roth Capital Partners, was baffled:
"I just can't believe this freakin' stock. It's insane. This is a big separation from those of us who like to pull out the calculators and look at reality. ... The momentum is huge. It's fear of missing out."
Pierre Ferragu, head of the global technology infrastructure research team at New Street Research, stuck to his guns:
"I think the stock changed its price very, very fast, but my tone remains exactly the same. So, we upgraded Tesla a few weeks back, $800 price target. Our idea is Tesla can do 2 [million] to 3 million units in 2026, and if you model that into the stock, it's probably worth $800 today."
Adam Jonas, who leads auto and space research at Morgan Stanley, saw huge runway for Tesla:
"If Thomas Edison and Henry Ford made a baby, that baby would be called Elon Musk. ... We think what's in the price right now is something approaching 4 million units of annual volume by the year 2030 at a 15% EBITDA [earnings before interest, taxes, depreciation and amortization] margin. So, that would be a margin roughly two times [the] auto industry average at a level of volume of 40%, maybe approaching 50%, of Toyota."
Colin Rusch, senior analyst and managing director at Oppenheimer, agreed that Tesla had some more room to run:
"What we do know is that they've been able to take double-digit market share in the premium market for vehicles, and so the possibility for them to take 10% or 12% market share in the overall auto market is totally feasible at this point. And then when you start translating that into revenue, I think it's a little bit high in where the price point would be to translate into those sorts of revenue numbers, but the earnings power is very substantial and there's a lot of sensitivity towards upside on margins there that we think can translate into some appreciation on the shares from here."
