Could Tesla Shares Reach $300 Before the End of the Year?

Could Tesla Shares Reach $300 Before the End of the Year?

Tesla shares have fallen in recent weeks, dropping roughly 21 percent since their most recent high on July 18. Still, the stock has seemed to rebound throughout this week, and it’s also up by nearly 90 percent year-to-date despite the losses. Additionally, with Cybertruck deliveries and Model 3 Highland news incoming, some analysts are wondering if the stock could reach $300 by the end of 2023.

Above: A Tesla logo (Image: Casey Murphy / EVANNEX).

In a recent piece, The Motley Fool begs the question of whether or not Tesla stock could reach $300 by this year’s end, with writer Neil Patel saying that it’s “definitely in the realm of possibilities.” At the time of writing during Thursday trading hours, Tesla shares were trading around $233, so reaching $300 by the end of the year would be a roughly 30 percent jump in the next four months.

In both Q1 and Q2, Tesla managed to beat on analyst estimates for revenue, each with year-over-year jumps of over 20 percent. Tesla reported $23.3 billion in revenue in Q1 and $24.9 billion in revenue in Q2, and the automaker also beat on delivery estimates. Throughout the first half of the year, Tesla delivered 889,000 vehicles. By comparison, Tesla delivered 565,000 in the first half of 2022.

Still, many shareholders have held concerns surrounding falling margins, with Tesla reporting an 18.2 percent gross margin in Q2. The margins drop comes following several price cuts from Tesla, which have put pressure on other automakers to reduce prices and has stoked demand throughout the year.

Tesla CEO Elon Musk has spoken to the price cut strategy in both quarterly earnings meetings, saying the company is prioritizing high volumes of deliveries with slightly reduced margins. He also explained that having a higher volume of Full Self-Driving-equipped (FSD) vehicles could unlock software-like margins in the future through a planned robotaxi business.

In spite of these concerns, Patel argues that a jump to $300 would not be out of the question for Tesla’s shares, especially given the company’s all-time high was $410 in November 2021 (adjusted for stock splits). Over the past decade alone, Tesla shares have surged 2,220 percent, and certain catalysts may be in line to help push the stock upward — despite near-term uncertainty.

Deliveries of the upcoming Tesla Cybertruck are expected in the months to come, with mass production of the electric truck slated for next year. A simplified Model 3 Highland could also help improve investor outlook, especially if it boosts sales in the competitive Chinese market. Still, Patel notes that the opposite could also come true if Tesla further delays the Cybertruck or Model 3 Highland, potentially causing shareholders to “punish the stock.”

It’s impossible to say with any certainty where Tesla shares will head in the coming months, though they’ll likely depend on when the Cybertruck officially starts delivering, and how it does. Additionally, investors can expect more news on Tesla’s financials when the automaker reports Q3 details at an earnings report in October.


Source: The Motley Fool