Summary:
ARK Investment Management has released an updated open-source Tesla model, projecting an expected share value of $2,000 by 2027.
According to their Monte Carlo analysis, the bull and bear cases, representing the 75th and 25th percentile outcomes, are estimated to be approximately $2,500 and $1,400 per share, respectively.
The updated Monte Carlo model shifts the previous 2026 target to 2027, providing readers with expected, bear, and bull cases to better understand the 2027 share price expectations. The base-case share price is derived from the average of one million simulations produced by the Monte Carlo model, while the bear and bull cases represent the 25th and 75th percentile values.
ARK’s new open-source Tesla model includes distributions for 41 independent inputs to simulate various potential outcomes for the company.
Tesla’s potential robotaxi business line is a significant driver, contributing 58% of the expected enterprise value and 45% of the expected EBITDA in 2027. In their simulations, electric vehicles account for 62% of revenues in 2027, albeit at much lower margins than robotaxi revenue.
The 2022 updates to ARK’s open-source Tesla model feature several key changes, such as incorporating assumptions and inputs for autonomous ride-hail services, capital efficiency estimates, stationary energy storage deployment, and extending the share price forecast to 2027.
Yesterday, Tesla said during its Q1 earnings that Full Self-Driving (FSD) miles driven have reached 150 million total miles.
ARK’s increased confidence in Tesla’s robotaxi service launch has led to the inclusion of a range of launch dates in their updated Monte Carlo model, with late 2024 being the weighted average of all cases.
Last year on April 14, ARK said Tesla shares might hit $5,800 per share in a bull case, by 2026. This price is before the Tesla 3-for-1 stock split that occurred on August 24, 2022.
It is important to note that forecasts are inherently limited and should not be the sole basis for making investment decisions. These projections are based on ARK’s modeling, reflecting their biases and long-term positive view of Tesla.
Click here to check out the fully updated open-source Tesla model on ARK’s website.
