ZINGER KEY POINTS
Tesla should deliver above Street's volume expectations if the stock has to continue its uptrend, says Future Fund's Gary Black.
He recommends using global EV adoption and Tesla’s EV segment share to predict future volumes.
Tesla, Inc. shares have been on a tear in recent sessionsand an analyst weighed in on what would keep the stock ticking up.
What Happened: For Tesla’s stock to go higher, the electric vehicle maker's volumes have to grow by more than 39% in 2023 and more than 27% in 2024, which is the current Wall Street consensus, said fund manager Gary Black in a tweet. The other positive influences the Tesla bull mentioned include:
22% Compounded annual growth rate of volume between 2023 and 2027
Stable ASPs
Gross margin, excluding regulatory credits, rising
"Any combo of global EV adoption, $TSLA EV share, or overall TSLA share growth above this level of [delivery] growth will be viewed positively," the fund manager said.
2-Variable Forecasting: Black noted that analysts have been using global EV adoption and Tesla's EV segment share to predict future volumes for years.
"Any combo of EV adoption and TSLA EV share that delivers that level of vol growth or higher is positive for $TSLA stock," he said.
Using two variables for forecasting rather than one is generally accurate, Black said. He noted that Apple investors have been forecasting smartphone adoption and the company's smartphone share for years to predict iPhone shipments.
"Even if TSLA BEV share falls modestly TSLA stock can do well if soaring EV adoption offsets it," he said.
Tesla shares bottomed at $152.37 (intraday basis) on April 27 and have soared over 40% as they ended Friday's session at $213.97.
In premarket trading on Monday, Tesla shares edged up 0.69% to $215.45, according to Benzinga Pro data.