Tesla Motors Inc (NASDAQ:TSLA)’s stock can grow to a price of $400 per share believe James Albertine of Stifel Nicolaus. The bullish sentiments are basically because of some good metrics such as decent gross margin and earnings beat in the latest quarter. The bullish outlook from Albertine follows the earnings announcement, where Tesla performed better than the estimates.
Tesla enjoys a strong gross margin
For the third-quarter, Tesla Motors Inc (NASDAQ:TSLA) posted impressive earnings of 2 cents per share beating the Wall Street estimates of a loss of 1 cent per share. On the other hand, the company lowered its fourth-quarter guidance to a range of 30 to 35 cents compared to the expectation of around 75 cents.
While speaking on CNBC’s “Fast Money,” on Wednesday, Albertine said he focusing on one positive metric.
“I think demand is there, and, quite frankly, 28 percent, or slightly higher than 28 percent, gross margin is what I’d be focused on—and the unchanged outlook for 2015,” he said.
Commenting on the production, Albertine said that it’s good that Tesla is constantly re-inventing itself by bringing in new features to justify the already high price tag of $110,000.
Moreover, he added that Tesla Motors Inc (NASDAQ:TSLA) has a positive pricing pressure with some good margins going in the right direction. Overall, the outlook of the company is good, but the EPS of the company could come down in the short-term as the electric car maker has already invested its capital into some big projects.
Margin stronger than Ford, GM
Separately, Stuart Frankel’s analyst Steve Grasso also rate Tesla as a “Buy.” Grasso notes that the company is in uptrend as the gross margin is quite promising. Now, the gross margin is 28% for Tesla, which is quite decent, when compared to the gross margin of GM and Ford, who are at 17%.
Also, mutual fund manager Ron Baron of Baron Capital, who is famous for his long-term strategies is bullish on the EV maker.
Not surprisingly, the Stifel Nicolaus analyst has set a Buy rating on Tesla with a price target of $400. Presently, the share is trading at more than $240 a share. Analyst see almost a 65% upside potential in the share.
On Thursday, Tesla Motors Inc (NASDAQ:TSLA) shares closed up 4.44% at $241.22.