Tesla shares have taken a massive beating in 2022 but that doesn’t mean TSLA stock is done growing.
I’m extremely bullish on TSLA shares despite the numerous distractions caused by Elon Musk and his purchase of Twitter.
The truth is stock price are unpredictable in the short run but always follow earnings in the long run.
Where Will Tesla Stock Be in 5 Years?
TSLA stock is currently sitting at a $680 million market cap with a projected $83 billion in annual revenue this year.
According to SeekingAlpha, Tesla is projected to generate $241 billion in annual revenue by 2027.
Assuming Tesla maintains similar margins and EPS then Tesla could reach a $3.5 trillion market cap by 2027.
That’s around a 5x in total market cap or around $1,000 per share for TSLA stock.
Tesla Must Focus on its Customers
Tesla grew massively during the COVID-19 pandemic before other competitors started producing electric vehicles. Now, several companies such as Lucid Motors, Rivian, and Fisker are either delivering or producing EVs to customers.
Increased competition is one of the reasons why Tesla experienced a dip in demand during its Q3 2022 delivery and production report. There are other electric cars on the market and Tesla is finally facing some competition.
Tesla needs to focus on its customers more than ever and eliminate unnecessary distractions. Tesla CEO Elon Musk is being distracted by Twitter, perfume, and other companies that don’t add to Tesla’s bottom line.
The good news is Tesla continues to innovate with its upcoming product pipeline including the Tesla Semi, Cybertruck, and Tesla robot Optimus.
Don’t Expect the Same Hypergrowth in the Future
TSLA stock did a 10x since 2020 but I don’t expect the company to grow as fast in the future. More competition and slower revenue growth is probably going to effect returns in the future.
But there is still plenty of upside in Tesla stock. Revenue and earnings continue to trend upwards despite all of the negative news.
Tesla will bounce back from a dip in demand and do well in the future. $1,000 per share by 2027 is a strong possibility as long as nothing drastic happens. If Tesla CEO Elon Musk stepped down as CEO then I’d sound the alarms. Otherwise, Tesla longs don’t have much to worry about.
TSLA stock is up 16,000% since its IPO and will continue to do fine in the long run despite some short term issues.