Profits, stock gains and a bright future lie ahead.
According to Macquarie Research's analyst Maynard Um, Tesla is on a path to profitability. First net income is to be achieved during the second half of this year.
This would have an obvious impact on the stock, which is expected to go up some 70%. Macquarie targets $430 (more than the $420 Musk suggested) compared to about $250 recently.
Tesla has a bright future because it's more a disruptive technology company - engaged in EVs, energy storage and solar - than say a conventional automaker.
Maynard Um said:
"Um's thesis relies on Tesla having enough cash "to get over the debt maturity hump." He said Tesla will be able to push through the debt challenges through multiple sources of cash flow. Macquarie estimated Tesla will get $500 million to $600 million in revenue from clean energy government credits in the second half of 2018. He also said cash flow will be boosted by rising Model 3 sales and access to $1.2 billion in unused debt."
"Musk has said Tesla does not have to raise more capital, but the analyst said it might be a good idea. "We believe a raise through equity would be beneficial in further strengthening its longer-term outlook as well as providing a cushion in case of any unexpected periods of economic softening.""