BusinessHABTsla stock prices: Tesla stock is trading at $262.56 per share as of June 13, and that’s not great, considering the company’s position as a niche automaker with a lot of potential. However, there are three primary reasons why Tesla’s stock price could double in the coming years.
Tesla is facing some major challenges right now. The company is still working to establish its brand in the automotive industry, which means it won’t have a stable revenue stream until at least 2021 (if not later). Additionally, Tesla operates in a highly competitive market, which makes it difficult for new automakers to stand out from their peers.
However, these challenges are temporary ones. And combined with the exponential growth of the car industry and Elon Musk’s track record as an innovator and executive leader, we foresee that Tesla will be able to turn things around soon enough. That being said…
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The Top 3 Reasons Why Tesla Stock Price Will Double
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## Tesla Has A Growing And Profitable Business Tesla has clearly made some progress over the past few years.
In 2016, the company’s automotive segment profit was $1.2 billion.
By 2019, this figure had risen to $3.7 billion. Tesla’s overall profit was $4.9 billion in 2018, an increase of 60% over 2017.
So, there has been a rise in profitability and the firm’s business is certainly growing.
In fact, Tesla’s revenue increased from $52.8 billion in 2017 to $58.4 billion in 2018.
Tesla’s growth has been impressive and it’s clear that the firm is becoming a major player in the automotive industry.
Tesla has also been expanding its retail presence. In 2018, the company opened more than 30 new retail locations, bringing its store count to more than 3,000.
Tsla stock prices
## Tesla Stock Price Will Double Because Of Its Stronger Balance Sheet Tesla’s profitability has risen significantly in recent years, but it’s still struggling with its balance sheet.
The firm’s total debt stood at $13.2 billion as of the end of 2018. That said, Tesla has managed to reduce its debt significantly since 2016.
By the end of 2018, Tesla’s debt was $5.5 billion. Tesla’s strong balance sheet is one of the primary reasons why the Tesla stock price will double.
The firm has been able to reduce its debt significantly and it has a growing cash flow.
These factors will help the firm to continue reducing its debt at a rapid rate.
In fact, Tesla has already announced that it will be able to pay down its debt by $2 billion by the end of 2020.
With this figure in mind, we could see the Tesla stock price double by the end of 2020.
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## New Models Are Delaying Tesla’s Profitability Tesla is growing quickly and expanding its presence in the automotive industry. This has proven to be a challenge, though.
In fact, Tesla’s overall production in 2018 was 230,000 vehicles, a decline of 9% from the previous year’s figure.
This decline was likely caused by the firm’s continuing efforts to ramp up production of the Model 3.
In 2017, Tesla sold over 700,000 Model 3 units, but in 2018, the production rate of the Model 3 jumped to almost 5,000 units per week.
This increased production of the Model 3 has come at a cost.
With demand for the Model 3 outpacing the firm’s ability to produce the car, Tesla has been forced to delay the launch of new products.
The company’s new battery Gigafactory 2 and Model Y are expected to be delayed.
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In fact, Tesla has delayed both of these products multiple times.
There is also the question of which Tesla products will be ready for launch in 2020. Clearly, the firm will have to make some difficult decisions.
It’s likely that the Tesla stock price will be delayed as a result.
## Tax Reform Will Boost The Tesla Bottom Line Tesla is growing quickly, but it’s struggling to turn this growth into profits.
This could all change in the near future, though. In fact, some analysts believe that the Tesla stock price will soon rise because of the tax reform.
This will provide the firm with more capital. The new tax law should help Tesla in a number of ways.
For example, the new law will allow companies to write off capital expenditures for up to 10 years.
This means that Tesla will be able to write off expenses related to its new Gigafactory 2 and the Model Y, which will boost the Tesla bottom line.
Beyond the new tax law, Tesla has also been investing in its growth. In 2018, the firm invested $4.9 billion in research and development, an increase of 10% from the previous year.
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## Bottom Line – There are a lot of reasons why the Tesla stock price could double in the not-so-distant future.
Investors should keep in mind, though, that the stock has been on a downward trend since the beginning of 2018 and it’s difficult to say when the price will start to rise again.
That being said, there are a lot of reasons why the company’s stock price could double in the not-so-distant future.
BusinessHAB