William Blair, a multinational independent investment bank and financial services company in the United States, said that Tesla's stock is worth buying because it has established an "Apple style" energy ecosystem. With the company's sales declining and a series of questions surrounding Musk, Tesla's stock price has plummeted by about 17% this year.
On Thursday (29th) local time, Jed Dorsheimer, an analyst at William Blair, rated Tesla as "outperforming the market" and stated that the electric vehicle manufacturer's energy business is "undervalued" as data centers continue to drive electricity demand growth and the rise of renewable energy.
We believe that Tesla Energy is the most underestimated part of the Tesla story, and given the recent easing of expectations for electric vehicles, we expect the narrative to shift towards the energy storage business, "he explained.
The three key drivers of Tesla's energy storage business include data center construction, efforts to stabilize the US power grid, and integration of renewable energy.
Dorsheimer said, "Combining the automotive business with long-term opportunities such as artificial intelligence, autonomous taxis, and robotics, we believe Tesla is the technology leader in the future energy sector, with an 'Apple style' ecosystem
For a long time, Tesla's products have been compared to Apple's products, and its cars are sometimes referred to as the "iPhone on wheels".
However, William Blair's research on Tesla focuses on its energy business, which includes solar panels, charging stations, and battery packs for residential and utility companies.
Dorsheimer estimates that by 2028, the compound annual growth rate of Tesla's energy business may reach 50%, doubling the revenue contribution of the department from 6% to 25%.
We believe that Tesla's Megapack is an independent leader in the energy storage field and we believe it will hold significant market share in these areas, "he added.
According to this report, Tesla's Megapack may become the company's fastest-growing business, with higher profit margins compared to its electric vehicle business. Megapack is a large rechargeable battery network that provides energy storage capabilities for public utilities and large commercial projects.
Our analysis predicts that Megapack will become Tesla's fastest-growing product and significantly increase its earnings per share contribution from $0.14 in 2024 to $2.35 in 2028, "said Dorsheimer
But not everyone is so convinced of Tesla. For example, well-known Tesla investor and CEO of Gerber Kawasaki Wealth Management, Ross Gerber, recently stated that he has sold about half of his shares in the automaker because no one is interested in buying the company's cars or robots.
I am concerned that Tesla's prime has passed. Over time, I have been lowering my stance because I lack confidence in Tesla's ability to achieve the goal of selling more cars set a few years ago, or even recently, "he said.
Overall, William Blair has not set a target price for Tesla, but stated that its premium valuation is reasonable.
We believe that the halo effect created by Musk, the company's first principles culture, and the technological advantages it has established ensure a significant valuation premium, "said Dorsheimer.