Key Takeaways
Investment bank Piper Sandler reiterated its $500 price target on Tesla Inc. (TSLA), arguing its core businesses justify a $400 share price and that investors are getting the Optimus robot business for free. The analysis sent shares up nearly 4 percent to close at $445 on Monday.
"Critically, this analysis excludes Optimus, Tesla’s forthcoming humanoid robot,” Piper Sandler analyst Alexander Potter wrote in a note. "In other words, at $400/share, we think investors can buy Optimus for free.'"
The bank's discounted cash flow model, which breaks Tesla into 17 product lines including vehicles, energy, and insurance, values the company's core operations at $400 per share. The valuation implies the market is currently assigning approximately $45 per share to the company's robotics and other future-facing projects not yet modeled.
The note suggests the $100 per share valuation assigned to Optimus and an "inference-as-a-service" business is a conservative estimate. Potter said these ventures "will be worth more than Tesla’s other businesses combined," though he noted the difficulty in forecasting products that could fundamentally reshape labor markets.
Piper Sandler's valuation is based on a 233x fiscal year 2027 earnings multiple, a significant increase from its previous 180x multiple. The firm argued that many sell-side models ignore less-visible revenue streams like in-house insurance and Supercharging. The update also makes a more serious attempt to factor in the 2025 CEO compensation plan and the robotaxi business.
However, the firm also lowered near-term estimates for Tesla's auto business, citing changes in demand and a reduction in regulatory credits. The focus is shifting toward future growth drivers like Full Self-Driving (FSD) subscriptions and robotaxi deployments to compensate for a potential slowdown in the traditional auto segment.
The analysis shifts focus to Tesla's long-term AI and robotics potential over near-term auto sales. Investors will watch for the reveal of the Optimus Gen 3 robot, which CEO Elon Musk has indicated could be delayed until July or August, as the next major catalyst.
This article is for informational purposes only and does not constitute investment advice.
