Welcome to Extreme Investor Network, where we bring you the latest insights and analysis on all things investing. Today, we’re diving into the overlooked but highly promising energy storage business of Tesla.
Tesla’s energy storage business has flown under the radar for many investors, but analysts at William Blair believe it is set for significant growth in the coming years. In a recent research note, analysts Jed Dorsheimer and Mark Shooter initiated coverage of Tesla with an outperform rating, highlighting the potential of Tesla Energy to drive the company’s future success.
According to Dorsheimer and Shooter, Tesla Energy is poised for a compound annual growth rate of 50%, driven by the increasing need to stabilize the grid, expand data centers, and integrate renewables into the energy mix. With products like the Megapack and Powerwall leading the industry, Tesla is well positioned to capture a significant portion of the energy storage market.
The Megapack, a battery storage system for the electric grid, and the Powerwall, which stores solar energy for homes, are expected to play a key role in the transition away from oil- and coal-powered plants. As data centers demand more electricity and solar power becomes more prevalent, Tesla Energy is predicted to increase its contribution to the company’s revenues to 25% from the current 6%.
Looking ahead to 2028, Dorsheimer and Shooter estimate that Tesla Energy could generate $3.35 of earnings per share, further bolstering Tesla’s overall financial performance. When combined with the company’s auto business and longer-term opportunities like AI, robotaxi, and robotics, Tesla is seen as a technology leader with an ecosystem reminiscent of Apple for the future of energy.
At Extreme Investor Network, we believe that understanding the potential of overlooked segments like Tesla’s energy storage business is key to making informed investment decisions. Stay tuned for more exclusive insights and analysis to help you navigate the world of investing with confidence.