Is Tesla Stock Worth $90 Or $780?

    Tesla joined the S&P 500 this month as a blue-chip stock, but everyone is still wrestling with a simple question about it: What kind of company Tesla is? How should stocks be valued? Wall Street's answer, however, is quite different -- Goldman Sachs has a price target of $780, while JPMorgan has a price target of $90.

    The dilemma is here. Is Tesla an automaker? Or a tech company? Or both? The company plans to deliver about 500,000 vehicles this year, up 36 percent from last year but slower than the 50 percent growth achieved in 2019. Wall Street analysts expect revenue to grow 26% this year, accelerate further in 2021, and then gradually slow in 2022. Estimates for 2020 and 2021 earnings have barely changed over the past two years.

With all the news surrounding Musk and his Tesla, investor patience has paid off handsomely this year. This electric car maker has now reported profits for five straight quarters, and its shares have risen more than sevenfold this year, returning nearly 18,000 percent since its 2010 IPO.

    Currently, Tesla is not only the world's largest automaker by market capitalization, but it is also worth more than General Motors, Ford, Toyota, Volkswagen, and BMW combined.

This raises the question: How are investors valuing the company?