Two Notable Stocks Predicted to skyrocket by 150% and 630%, as Perceived by Specific Wall Street Analysts
In the world of thriving investments, two giants have caught the eye of analysts: Tesla (TTD -2.15%) and The Trade Desk (TSLA -0.03%). Boasting remarkable returns of 555% and 163%, respectively, over the past five years, these powerhouses seem poised for further success. Here's what you need to know:
Tesla: The Electric Giant
Standing tall as the leader in electric car sales, Tesla has managed to keep its crown despite losing market share in the US and China in 2024. However, the year was marred by weak demand driven by intense competition and rising interest rates. To entice potential buyers, Tesla resorted to price cuts, narrowing profit margins and leading to a series of unimpressive financial reports.
The Q4 results showed a modest 2% boost in revenue to $26 billion, offset by a decline in automotive sales. The operating margin contracted by 2% as well, while non-GAAP net income rose only 3% to $0.73 per diluted share. It's worth noting that Tesla announced a decline in vehicle deliveries, marking the company's first-ever annual drop in this category.
Despite these setbacks, Elon Musk offered a glimmer of hope, announcing that Tesla would debut autonomous ride-sharing services in Austin and several other US cities by the end of 2025, which could significantly boost the company's fortunes.
While analysts like Tasha Keeney at Ark Invest have set a bullish target of $2,600 per share for Tesla in 2029, this lofty 630% upside assumes astronomical growth rates. Even with a successful robotaxi business, it's uncertain whether such estimates can be met, given the current value of the ride-sharing market.
That said, demand for ride-sharing services could surge in the future, propelled by autonomous vehicles' potential to slash costs. By 2030, the addressable market is projected to be staggering $10 trillion, theoretically enabling Tesla to capture a substantial portion of it if it can crack the code on a successful timeline.
It's worth reiterating that Wall Street expects Tesla's earnings to grow at a dazzling 22% annually through 2026. Given the current valuation of 147 times adjusted earnings, only a substantial acceleration in earnings growth can justify such a high multiple. If you believe that Tesla has the prowess to revolutionize the mobility industry, now might be the opportune moment to consider an investment in this electric titan.
The Trade Desk: Ad Tech Powerhouse
Specialized in digital advertising, The Trade Desk’s demand-side platform (DSP) empowers ad agencies and brands by helping them automate, optimize, and measure data-driven ad campaigns across various digital channels. Established as one of the pioneering ad tech companies, The Trade Desk built its reputation on advanced data-driven decision-making capabilities.
Competitors such as Alphabet and Meta Platforms pose formidable challenges, but The Trade Desk's independence offers significant advantages. For instance, The Trade Desk is not burdened by ad inventory and does not compete with publishers, which fosters healthy relationships and facilitates easy access to valuable data.
Jeff Green, CEO of The Trade Desk, emphasizes its commitment to keeping the industry's richest data-driven decision environment, which sets it apart from competitors.
Despite delivering disappointing Q4 results, missing its revenue guidance for the first time in 33 quarters, The Trade Desk has optimistic outlooks. The company is addressing its "missteps," reorganizing, building direct relationships with brands, and shifting its product development strategy to small, frequent updates, all steps to improve its performance.
Morgan Stanley's bullish target of $200 per share assumes a remarkable 29% annual revenue growth through 2027, which aligns with an estimated 22% increase in ad tech spending over the next decade. However, realizing this target would necessitate affording The Trade Desk a higher price-to-sales multiple, making it a challenging proposition at best.
Despite the apparent hurdles, The Trade Desk remains an attractive investment. Currently trading at 44 times forward earnings, a substantial discount to its preceding two-year average, investors looking to hold for 3-5 years might consider this as an opportune time to invest.
- In terms of monetary gains, Tesla and The Trade Desk have demonstrated impressive finance performance over the past five years, delivering returns of 555% and 163%, respectively.
- When discussing potential investments, analysts often mention Tesla, the electric vehicle giant, which has faced challenges in maintaining its market share and experienced declines in sales and revenue in 2024.
- The inherent potential of autonomous ride-sharing services has led Elon Musk to announce that Tesla will debut such services in various US cities by 2025, hopefully boosting the company's financial situation.
- Investors looking into The Trade Desk, an ad tech powerhouse, might find an attractive opportunity now because the company is currently trading at a discounted price-to-earnings multiple compared to its two-year average, possibly an indication of potential future growth through 2027.
