If Kathy Wood is right Tesla has an upside of 358% by 2025 – Global

Kathy Wood, founder of the ARK Foundation, released its forecast for Tesla shares over the weekend

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(TSLA) and presented an astronomical target price of $ 3,000 per share by 2025. This is slightly more than a 358% return per share from last Friday’s closing price, which stands at just under $ 655 per share.

Wood expects the stock to grow each year by an average (CAGR) of 50%, which will make Elon Musk’s company have a market capitalization of $ 3.6 trillion. The largest U.S. company today, Apple (AAPL) is worth about $ 2 trillion and it will need to present growth data of 30% each year to retain the title of the largest company in the U.S. economy.

Since issuing its forecast in 2018, Tesla shares have yielded investors over 100% each year. The reason why Wood is so bullish on the stock is the potential inherent in the autonomous taxi business that Tesla is promoting.

“In the latest revaluation we have done, ARK has assumed that Tesla has a 30% chance of handing over fully autonomous cars by 2024,” reads a study released by the fund. “We now estimate that the probability has grown to 50% by 2025,” they added.

ARK estimates that Tesla’s autonomous taxis could add $ 160 billion to Tesla’s EBITDA (earnings before interest, tax, depreciation and amortization) line. In 2020, the EBITDA line was $ 4.8 billion.

Tesla management expects an annual increase of 50% in vehicle delivery in the coming years. This means that this year it is documenting the delivery of 730,000 vehicles, after last year it delivered almost 500,000.

From March 1, 2020 to January 8 this year, the stock rose from $ 105 to $ 880, or 740% yield. However, since its inception earlier this year, the company’s share has fallen by almost 26%, with the stock falling more than 10% on January 1, due to the growing overcrowding in electric vehicles and the strengthening of the old car companies including Ford (F), General Motors ( GM) and Volkswagen (VWAGY), which are investing tens of billions of dollars to enter the electric and autonomous vehicle market.