2023-04-21 04:50:08 ET
Cathie Wood's ARK Invest issued a new price target on Tesla ( NASDAQ: TSLA ) that would value the EV maker at more than $6T in fewer than four years.
ARK issued a report late Thursday, a day after Tesla's ( TSLA ) disappointing quarterly results, that valued the company at $2,000 per share by 2027 as the base case.
The target is bookended by a 25% chance of a bear case where TSLA hits $1,400 or less in 2027 and a 25% chance of a bull case where it reaches $2,500 per share or more.
The $2,000 target would value Tesla ( TSLA ) at about $6.34T, compared with the current market cap of $516.6B. Tesla ( TSLA ) shares fell 10% on Thursday on margin worries following price cuts through this year.
TSLA is the largest holding in Wood's flagship ARKK Innovation ETF ( NYSEARCA: ARKK ).
“We want Tesla to scale its units because each one of them now represents the potential for a robotaxi, or a robotaxi fleet," Wood said on CNBC.
“The robotaxi service is going to be, from a margin point of view, more like a SAAS business and so we think that it is very smart to maximize unit because they have so much option value now,” she added.
“Tesla’s prospective robotaxi business line is a key driver, contributing 58% of expected enterprise value and 45% of expected EBITDA in 2027,” ARK analysts said in their report . “Across our simulation set, electric vehicles account for 62% of revenues in 2027, at substantially lower margins than robotaxi revenue.”
Not surprisingly, Wood added TSLA shares to ARKK on the dip last night, buying 219,810 shares to bring it to 0.4799% of the portfolio. ARK also added 36,213 shares to the ARK Next Generation Internet fund ( ARKW ), bringing that to 0.4827% of the portfolio.
TSLA is down 50% from a year ago, but has gained about 50% year to date. ARKK is down 33% in the past year and up 23% year to date. ARKW fell 34% in a year and is up 32% in 2023.
More on Tesla and ARK
- Why I Just Doubled My Tesla Position
- Tracking Cathie Wood's ARK Invest 13F Portfolio - Q1 2023 Update
- Cathie Wood inspires two more leveraged ETFs tracking her ARK funds
- Tesla Stock Sold On Facts: What's Next?
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Cathie Wood puts a $2,000 price target on Tesla for 2027, driven by robotaxis