Just on February 20, 2017, Tesla's stock was trading at $272 per share. Ron Baron, one of the company's major investors, expects Tesla to give a return of 30 to 50 times its invested capital in the next 15 years. Currently, Baron has $300 million in investments, as well as owning 1.5 million shares in Tesla bought over three years at $208 per share.
Tesla's Future Is Looking Bright
According to Market Realist, Baron thinks that Tesla has good long-term fundamentals and is also well- positioned in the electric vehicles market. Baron is expecting Tesla to rapidly grow over the next decade.
Tesla's sales are rising at a rapid rate, and its five-year compound annual growth rate is at 80%. Baron also believes that Tesla is going to reach $20 billion in sales next year; this year, they're doing $8 or $9 billion, while last year they did $5 or $6 billion.
Tesla Has Been Progressing Over The Years
Baron's claims have been reinforced by reports claiming that Tesla stock has posted a CAGR of 40% over the last seven years. Baron also believes that Tesla is a company that possesses strong fundamentals and a significant global market.
SolarCity Acquisition Will Be Worth It
According to Yahoo! News, Tesla's recent deal with SolarCity is also going to help Tesla going forward, as demand for energy is expected to rise high alongside the growing demand for electric vehicles. Baron has also been optimistic about the SolarCity deal, where he claims it coming with his admiration of Tesla CEO, Elon Musk.
Musk's Vision Of The Future
Baron has been endorsing Musk and his vision for bundling electric vehicles, solar arrays, and home battery packs. He foresees the rise in electricity demand due to the increasing adoption of electric vehicles, an opportunity that Tesla needs to take advantage of.
Baron also believes that SolarCity's solar solution products, which includes panels and special roofs, can also provide a boost to Tesla's product lines. Tesla's strategic move to purchase SolarCity aims at revamping and improving the electric grid, which could potentially provide support and opportunity for more than just the automobile market.