The Robotaxi Day event, which is supposed to reveal the car leading Tesla’s (NASDAQ:TSLA) self-driving endeavors, has been rescheduled to October after being pushed from August.
Despite the delay, the talk of autonomous driving will still be a big focus for investors right now, says Oppenheimer’s Colin Rusch, a 5-star analyst rated in the top 1% of the Street’s stock pros.
“We believe the value of its AI platform remains at the center of the TSLA valuation debate,” Rusch opined. “We continue to believe TSLA’s data collection advantages and neural network are critical assets supporting the company’s leadership position in commercializing autonomous driving technology.”
Rusch anticipates that autonomy will achieve commercialization through a gradual build-up of functionalities, each validated through field testing. “We believe TSLA’s data collection capacity is key to driving improved task automation and supporting acceleration of its learning cycles,” Rusch went on to say.
Looking at the value of its FSD (full self-driving) subscription service, based on Tesla’s current pricing model, Rusch anticipates “value capture likely” in the range of $1-2 in EPS a year by 2030, assuming a 50% “take rate,” around 15-18 million vehicles on the road, and an incremental net margin contribution of 55-70%.
That said, partly down to an “uncertain regulatory backdrop,” the road ahead could yet be bumpy for commercial driverless vehicles both for Tesla and other players. So far, federal regulators have allowed states to set rules as the technology evolves, as long as vehicles comply with Federal Motor Vehicle Safety Standards. Meanwhile, states have primarily concentrated on approving limited testing for individual OEMs, with requirements for safety operators and data disclosure. “Formal feature approval processes remain unarticulated,” Rusch summed up on the matter.
Bottom-line, Rusch reiterated a Perform (i.e., Neutral) rating on TSLA shares without providing a fixed price target.
The Street does have a target in mind and it lands at $193.18, suggesting shares are currently overvalued by 25%. The overall analyst consensus rates Tesla stock as a Hold, based on 13 Buys, 13 Holds, and 3 Sell ratings. (See Tesla stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
