A Tesla, Inc. (NASDAQ: TSLA) bull reiterated his view that the company should be valued more like a tech company than as an automaker and said the 2024 consensus estimates for the electric vehicle pioneer are notably low.
What Happened: Tesla could soon overtake revenues of legacy automakers Ford Motor Co. (NYSE: F) and General Motors Corp. (NYSE: GM), said Future Fund's Gary Black.
Wall Street expects Tesla's revenue to grow by 24% per year between 2023 and 2027, the fund manager noted. Ford and General Motors will likely to see 2% and 4% revenue growth per year for the same time frame, he said.
Tesla's top line will steamroll past Ford by 2026 and GM by 2027, the analyst said.
Black also said Tesla, with its 24% expected revenue growth and 28% expected earnings growth, should be valued more like a tech company rather than an auto company.
"Future expected growth rates drive P/Es - not the category in which one competes," he added.
Street Numbers Fall Short: Tesla is having a number of growth drivers in the near term, Black said. The company is prepping for the launch of the next-gen "Highland" Model 3 over the next few weeks, he said.
In anticipation of the launch, the company has pushed back all Model 3 delivery timelines in Europe to the fourth quarter, with Model 3 Performance deliveries extended to Jan. 2024, he added.
Black noted that the refreshed Model-3 is rumored to resemble a small Model S. "Between refreshed M-3, Cytruck launch, FSD Alpha V12 L4 autonomy, and new $7,500 instant EV rebate, starting 1/1/2024, TSLA 2024 Street volume growth remains way low," he said.
The fund manager expects Tesla's 2024 volume growth to be 53%, nearly double the Street's growth estimate of 27%. He also said he expects 2024 earnings per share of $5.40, well above the consensus of $4.70.
Tesla ended Friday's session down 2.11% at $253.86, according to Benzinga Pro data. Since the company's second-quarter earnings report on July 19, the stock has shed about 13%.