Tesla's Meteoric Rise: Why $1K a Share Isn't So Crazy

Tesla Defies the OddsTesla (TSLA) CEO Elon Musk and his team have been doubted and bet against since the start for what seemed like good reason. Successful startups are rare in general, but in the US auto market, with legacy competitors like General Motors (GM) and Ford (F) they are unheard of – especially when they are an unprofitable electric vehicle (EV) start-up going public in the wake of the worst global financial crisis in decades. However, in proper Musk form, Tesla found a means to rewrite the script. Since its inception, the Zacks Rank #1 (Strong Buy) stock has been up a mindboggling 32,564%, but who’s counting?Image Source: Zacks Investment ResearchWith such extraordinary gains, it is only natural that investors feel dizzy buying shares at these heights. Nevertheless, context is paramount on Wall Street. TSLA investors have had to endure a long, frustrating, and choppy correction since shares topped in late 2021. Against all odds, TSLA has finally clawed its way back, printing fresh all-time highs this week. Though the stock may be extended in the short-term, many long-term investors may want to plot potential price targets should the breakout stick. Below are four ways to project long-term price targets in the EV juggernaut:Tesla Fibonacci ExtensionsFibonacci extensions are a technical analysis tool that uses a sequence of numbers to help predict (or at least provide a roadmap) how a stock price might extend after a significant move. Standard extension levels include the 161.8% and 261.8% levels. When plotting Fib extensions on the current long-term TSLA break out from late 2021, the first two long-term TSLA targets are ~$600 and ~$900.Image Source: TradingViewTesla Stock Measured Move TargetThe measured move technique is the most straightforward price target method. Simply identify the high and low of the base and take the difference. Then, add the difference to the height of the base to determine the price target. TSLA’s price extension using the measured move method gives investors a $727 target.Image Source: TradingViewSmart Money: Ron Baron and Tesla Billionaire investing legend Ron Baron says that he sees Tesla as a $5 trillion company within the next decade. With Tesla currently trading with a $1.31 trillion market cap, Baron sees shares soaring to ~$1600. While skeptics may scoff at such a price target, Baron is worth listening to – especially regarding Tesla. Baron invested hundreds of millions into Tesla between 2014 and 2016 and has since seen his profits bulge to over $6 billion.Cathie Wood, best known as the manager of the Ark Innovation ETF (ARKK), is also worth listening to. She was an early and loud bull on the stock. Wood sees TSLA shares soaring to $2600 over the next five years.Tesla Stock Valuation AssumptionFinally, investors can leverage valuations to make price target assumptions. Tesla’s price-to-sales ratio currently sits at a modest 15x. Assuming that shares can trade back to the historical 2021 valuation of ~30x sales, this method would assume that TSLA shares can double from here to $800.Image Source: Zacks Investment ResearchConclusionInvestors can leverage several different methods to determine long-term price targets. Using these methods on Tesla, the stock is amid a historical breakout that can send shares to $1,000 or more.Free Report: 5 Clean Energy Stocks with Massive UpsideEnergy is the backbone of our economy. It’s a multi-trillion dollar industry that has created some of the world’s largest and most profitable companies.Now state-of-the-art technology is paving the way for clean energy sources to overtake “old-fashioned” fossil fuels. Trillions of dollars are already pouring into clean energy initiatives, from solar power to hydrogen fuel cells.Emerging leaders from this space could be some of the most exciting stocks in your portfolio.Download Nuclear to Solar: 5 Stocks Powering the Future to see Zacks’ top picks free today.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Ford Motor Company (F): Free Stock Analysis Report General Motors Company (GM): Free Stock Analysis Report Tesla, Inc. (TSLA): Free Stock Analysis Report ARK Innovation ETF (ARKK): ETF Research ReportsTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks