‘tesla stock price prediction: Tesla, of course, is one of the most polarizing stocks in the market today. People have strong opinions about Tesla stock, either on the bullish side or on the bearish side, arguing strongly in favor of or against Tesla stock. I’ve never been on either side of those two extremes. I’ve never been extremely bullish or extremely bearish on Tesla stock. I’ve sort of been in between, meaning that it’s slightly expensive but also agreeing that it does have excellent prospects and is the best-in-class EV company worldwide. So I’ve kind of been on the fence.
Tesla Stock Price Prediction: Two Years Ahead 2024 – 2025
Here in this article, I’m going to answer where I think Tesla’s stock price could be two years from 2024 to- 2025. Two years from now. Now, I did a video answering where I think Tesla’s stock price will be this year, and that video got so many views and so many likes and comments that it made me want to do this video answering where it will be in two years. So let’s jump in, let’s look at the details, and let’s answer these questions about Tesla stock.
Current Status of Tesla Stock
To answer where I think Tesla stock will be in two years, I need to know where the stock price is now. And I could see Tesla stock price is $27.41. Tesla has yet to reach that high it hit in late 2021. It’s been on a downward trend ever since that high point, and that’s understandable. I think all EV stocks were overhyped in 2021.
The valuations got a little too extreme, so it’s understandable that it would kind of come down a bit. Although this is a big downward trend here on Tesla stock for several years now, and it seems to be heading in that downward direction. All of the news and sentiment about EV stocks has not been great, so you can understand why Tesla stock has been on this downtrend.
Valuation Analysis
But let’s see where it’s headed in two years. We also need the current valuation, which according to its price-to-earnings ratio, Tesla is trading at a price-to-earnings of 66.6. This is arguably the cheapest valuation you’ve been able to buy Tesla stock in almost forever. So while the stock price is down, you’re getting a relatively cheap valuation on Tesla stock according to its own history.
Not according to other carmakers, right? If you compare Tesla stock with Ford, GM, Stellantis, and other legacy automakers, Tesla is extremely expensive compared to those. But if you compare to other EV automakers, Tesla might look cheap. So it’s all determining how you compare, how you see Tesla stock that will tell you if you think it’s too expensive or too cheap.
Earnings Projection
All right, we also need Tesla’s earnings per share estimate for 2025, which I have here at $490 per share. That is this number here. That’s the expected earnings per share for Tesla stock in 2025.
Valuation Model and Price Estimation
So now that we have those figures, we can go here to my valuation model. And using the $490 earnings per share estimate for 2025 that I got from Wall Street analysts that are following Tesla stock, they’ve all put in their forecast for earnings per share for Tesla stock for 2025, and this number is the consensus figure out of all the Wall Street analysts that are following Tesla stock.
So taking that number and the 66.65 price-to-earnings ratio, that is the current price-to-earnings for Tesla stock, you would get an estimated stock price of $326.59 by the end of 2025. Now, that would be a considerable increase from the $27 the stock is trading at right now.
Evaluation of Potential Returns
From 207 to 326, that would be a more than 50% increase in Tesla stock price in a little less than two years. Now, Tesla stock investors have seen better gains than this in shorter periods of time. Still, an increase of over 50% for two years, I think Tesla stock investors would be happy with that return. I know if I was a Tesla stock shareholder, which I am not, if I was, I would be happy with that return. Over 50% for two years, I think, is a very solid return for Tesla stock.
Considering Future Trends
But that’s not my base case. I don’t think that the valuation is going to be there, precisely, or more specifically, because I don’t think the price-to-earnings ratio is going to hold at 66. I think the price-to-earnings ratio is going to decrease over the next two years. I think investors are going to pay a lower valuation for Tesla stock as the company’s growth rate starts to slow down. As its increase in rate of growth is decreasing, and that’s just the law of large numbers.
You can’t, as Elon Musk even said, you can’t grow at a 50% compound annual growth rate forever. And that’s kind of a hint that the CEO thinks the growth rate is going to be a little bit slower over the next few years compared to the previous few years.
Forecasted Price Range
Still, its prospects are excellent. It’s going to grow. It’s expected to grow significantly, although not as quickly as in the previous five years. So a valuation of 50, perhaps, would be more reasonable, and the stock price could be $245 per share in two years if the stock was trading at 50. But if it’s even worse and the price-to-earnings ratio falls to 40, Tesla stock price could fall to $196 per share, which, remember, it started in 2023. Tesla’s stock price was lower than this.
And then, finally, if the price-to-earnings ratio were to fall to 25, Tesla’s stock price could fall to $122.50 per share. My estimate for where I think Tesla’s stock price will be is somewhere between the price-to-earnings ratio of 40 and 50 and somewhere in the price range of $230 per share to $250 per share by the end of 2025. So I think Tesla stock price will move back up over the next two years, but I don’t think it’s going to reach the highs it previously reached in late 2021.
Conclusion and Advice
Still, I think the stock is going to deliver solid returns to investors. However, it’s going to be a difficult next two years for Tesla. This increase in stock price, I don’t think, is going to be straight up. I think it’s going to be volatile, up and down, choppy with violent swings and risky moves for investors. So I wouldn’t approach Tesla stock unless you’re ready to accept these volatile changes in the stock price.
Although, longer term, I think Tesla stock price moves higher. It’s just going to move higher in a volatile fashion with changes in performance, with changes in the number of production deliveries, price changes, all of that that’s involved in the growth of this company will start to move the stock price higher and lower.
So there you have it, my best estimate for where Tesla’s stock price will be in two years.
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