By Sam Boughedda
In a Bull vs. Dangle debate on Tesla (NASDAQ:TSLA) Thursday afternoon, hosted by Investing.com and Boulevard Insider.com, GLJ Be taught analyst Gordon Johnson and Co-Founder, President, and CEO of Gerber Kawasaki Wealth and Funding Administration, Ross Gerber outlined their quiz on the present health of Tesla and where they deem the stock is headed.
In a huge-ranging heated debate, Gerber spread out by citing he believes the bull case for Tesla "is more intact than it be ever been," pointing to Tesla's cash on the books, two unique gigafactories ramping, and "whole dominance" in battery technology and charging.
"Tesla is the leader in EV sales globally, with over 1.3 million in sales and rising to maybe over 2M in sales this year," argues Gerber.
"Now, with the associated fee cuts bringing the prices relief down to a vary where a complete unique stage of prospects can come up with the money for the vehicle, we own considered set a question to skyrocket over the closing couple days and week," he provides, clarifying that present details presentations inventory has dropped dramatically for the explanation that worth cuts.
Moreover, Gerber moreover stated that the adoption of EVs is rising dramatically, and with the U.S. mild on the support of totally different markets, he sees so vital upside available within the market and alternate.
"Tesla will in all probability be love Apple (NASDAQ:AAPL) and take dangle of a huge proportion of this upside," Gerber declared, moreover asserting that EVs are higher vehicles than ICE (interior combustion engine) vehicles.
The Gerber Kawasaki President and CEO, be taught about's Tesla shares at $150-$200 by year-quit, although he believes it would possibly maybe perchance maybe double to $240 within the occasion that they fabricate neatly.
On the totally different hand, Johson sees Tesla stock at a 6x quite lots of on round $2 EPS, so about $12 per portion. The analyst stated he "couldn't disagree more" with Gerber's argument and started by clarifying that his agency's research estimates that the associated fee cuts approach in at round $7,250 on moderate across all of Tesla's vehicles.
"While you happen to behold at their income per vehicle in Q3, it used to be round $12,797. They handsome cleave prices by $7,250, so the unique implied income per vehicle on these cuts is $5547," explains Johnson. "That is a 56.7% hit to their margin on these worth cuts."
Johnson argues that for Tesla to get relief to income/breakeven, this can must grow unit sales by 167.2% year-over-year in 2023. "What that moreover technique is that their roughly 26% auto uncertain income would fall to about 12.5%," he provides, occurring to display that in 2023, Tesla is "going to attain round $2.18," relating to Tesla's EPS, with the present consensus estimate being $4.20.
"You are speaking a few firm that goes to behold its earnings fall from 2022 to 2023 primarily primarily based on these worth cuts and assuming no more worth cuts of handsome below 50%. That will perchance maybe set their forward quite lots of right now at 58.2x" stated Johnson.
"Here's handsome a vehicle firm," expressed the GLJ analyst, "this will not be a growth firm anymore."