Tesla may start turning a profit as early as this year, automotive analyst Jamie Albertine told CNBC.
“Based on what we’re seeing in the trajectory of production, we think they will be profitable on a non-gap basis later this year,” Albertine said Friday on “Power Lunch.” “We think we’ll be testing $385 [price target], on the way to the all-time high of $389, within the next two quarters.”
Friday marked Tesla’s eight-year anniversary as a public company with a nearly 2,000 percent stock price increase. Shares of the electric car company’s stock were just $17 when it began trading on the Nasdaq on June 29, 2010, compared with around $345 on Friday.
The only problem: The company has never made money on an annual basis. The company lost nearly $2 billion last year and burned about $3.4 billion in cash after capital investments.
But Albertine said investors like CEO Elon Musk because he’s seen as an innovator and Tesla has had “significantly more demand than any other auto manufacturer has had on Earth, in terms of reservations for a vehicle.”
Trip Chowdhry, managing director of equity research at Global Equities Research, pointed out that Tesla’s revenues this year will be in the range of $20 billion.
“People are buying Model 3’s without even test driving [them],” Chowdhry said Friday on “
Still, Tesla’s growth efforts face many obstacles, including the need for more factories and expanded product lines. Albertine said Musk will likely invest in factories in China in an effort to move in to the Asian market.