Tesla Set To Topple 2 Legacy Auto Giants In Revenue By 2027, Says Analyst: Why Wall Street Estimates For Volume Growth Are 'Way Too Low'

A Tesla, Inc. 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. F and General Motors Corp. 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.

With $TSLA revs expected by WS to grow by +24% per year between 2023 and 2027, and $GM and $F expected to grow by +4% and +2% respectively, $TSLA revs will pass $F in 2026 and $GM in 2027. $TSLA already generates more net income than either $GM or $F. @charliebilello @elonmusk pic.twitter.com/KqzGQmJY4h

— Gary Black (@garyblack00) August 6, 2023

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.

See Also: Everything You Need To Know About Tesla Stock

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%.

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