Alexander Potter, an analyst at Piper Jaffray, recently casted aside his skepticism for Tesla stock, upgrading Tesla shares to Overweight and set a price target of $368.
When you look at the stocks on a risk analysis basis, Tesla exhibits all the signs of a risky stock. Tesla as a company is still losing money as it moves forward on its most ambitious project, yet, and shares are incredibly expensive by most any measure.
“But even with all the risks, we think growth investors can’t afford to ignore this stock,” Alexander Potter was quoted saying.
Tesla investors were heartened by the news. Shares rose 3.3% Monday to $312.39. The stock is now up 46% in 2017. Tesla recently surpassed Ford in market value and is nipping at the heels of General Motors, the country’s largest auto maker by market value.
Potter concedes that Tesla plays by its own rules. “The company burns through cash at a rate that better-established companies would likely be crucified for.”
But, “In the minds of its customers, employees, and shareholders, Tesla isn’t just another company,” Potter wrote. “More so than any stock we’ve covered, Tesla engenders optimism, freedom, defiance, and a host of other emotions that, in our view, other companies cannot replicate.”
Potter notes that he’s been driving his own Tesla for the last seven months.
He warns that Tesla might not make its 2018 target of delivering 500,000 cars, but he thinks the company will deliver 750,000 cars by 2019.
And Potter is optimistic about Tesla’s affordable Model 3, which is slated to be released later this year. “Other vehicle makers are racing to introduce their own electric vehicles, but in the next few years, we believe no company will release a product that comes close to matching Tesla’s Model 3, which will be the world’s first truly mass-market electric vehicle.”