- Tesla's services business could be worth more than all of its car sales by the end of the next decade, Morgan Stanley said.
- The bank estimates autopilot, insurance, energy, and everything else to be worth about 53% of a new street-high target price of $540 by 2030.
- Investors should also consider comparing the company to other services companies, like Apple, Tinder, Roku, and video game makers, the analysts said.
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Wall Street analysts have long compared Tesla to Apple and other tech giants more easily than its Detroit competitors.
Now, Morgan Stanley's Adam Jonas has taken one of the strongest steps yet to do just that — and is including an array of companies including Tinder, Roku, and video game makers too.
For the first time this week, the bank included Tesla's ancillary services — like its autopilot software, home energy products, insurance, and the long-awaited Tesla network — in its valuation of the company, which now sits at a street high of $540.
"To only value Tesla on car sales alone ignores the multiple businesses embedded within the company, and ignores the long term value creation arising from monetizing Tesla's core strengths, driven by best-in-class software and ancillary services," Jonas said in a note to clients on Wednesday.
His 2030 "sum of the parts" valuation gives $254 per share to Tesla's core automotive sales category, which CEO Elon Musk has said will reach 500 million units this year. That's about 47% of his total target.
Tesla network services, comprising everything from the company's Supercharger network to driver-assistance software, premium infotainment, and performance upgrades — gets the next largest weight in Jonas' analysis, at $164 per share.
Ride-hailing, something Musk previously said would be in place with a million self-driving by the end of 2020, will be worth $38 per share by 2030, Jonas says.
Insurance, which Tesla launched in California last year, and a third-party supplier business, make up the final $73 per share of Jonas total target.
All together, the new weight on non-automotive revenues are another step in transformation from a product sales business to a services-heavy, recurring revenue business like Apple, to which Morgan Stanley has often compared Tesla. The iPhone maker, Jonas points out, has grown services revenue to 40% of overall profits.
But the comparisons don't stop there. Morgan Stanley says it consulted across teams for relevant comparisons to Tinder, Roku, and even video game makers.
"Yes, consumer behavior in a dating environment is relevant," Jonas said. "A real eye-opener for us."
Tesla's stock price is up 476% this year, fueled most recently in November by the company's addition to the S&P 500 index.
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