A $1,000 investment in Tesla will now return that much if the stock hits Cathie Wood's updated price target

On Friday night, Cathie Wood's Ark Invest analyst Tasha Keeney tweeted that the company's 2026 price target for Tesla, Inc. TSLA, once adjusted for the 3-for-1 stock split implemented in August 2022 and removing the ride-sharing service from the valuation framework, would be approximately $500 per share.

Down In The Dumps: Tesla shares hit a rough patch in 2022 as they continued to slide throughout the year and ended in a loss of about 65%. After a stellar run amidst COVID-19 in 2020 and a pretty solid performance in 2021 even in the face of tough comparison, the stock ended 2022 as the worst performing mega cap stock.

The weakness reflects an industry-wide pullback, as production disruptions, input price inflation and weak demand were headwinds . While CEO Elon Musk has squarely blamed the economy for all of Tesla's woes, the company has also faced some company-specific issues. Musk's Twitter buy was widely criticized by analysts, investors and other Tesla backers. Fear of further stock sales by the billionaire to repay loans made for the purchase of Twitter and financial efforts to scale the social platform remains an overhang for the stock. As Musk focused on Twitter, Tesla investors cried foul and demanded his return to his flagship electric vehicle business.

Then, of course, competition began to slowly chip away at Tesla's once formidable market share in electric vehicles. In China, the company's key market, the lack of an affordable vehicle began to hurt sales. A car under $30,000 is Tesla's need of the hour in China, says Future Fund co-founder Gary Black.

See also: How Elon Musk made his money

No New Year relief: Tesla shares fell more than 12% to a new low since mid-August 2020 in the first trading session of 2023. While the stock retaliated on Wednesday, China's weakness in December sales pushed it back on Thursday. A sharp price drop announced by Tesla China on Friday triggered a negative reaction at first, but the stock pared losses amid positive market sentiment.

The next catalysts could be Tesla's fourth quarter earnings report, due on January 25, and then the company's first-ever Investor Day scheduled for March 1. Expectations for the fourth quarter are mixed, given the company's announcement of multiple price cuts across all regions in late 2022. Ark Invest's Wood suggested that Musk could announce a $25,000 price tag for his vehicles new generation at the company's Investor Day.

Tesla Returns: $1,000 invested in Tesla would currently return 8.6 shares. If the stock hits Wood's price target of $500, the same 8.6 shares would be worth $4,300. This translates to a 330% return on a $1,000 investment. The investment horizon could be up to three years, given that Ark's price target is 2026.

In the near term, analysts' one-year average price target for Tesla is $256.67, suggesting 127% upside potential.

Tesla closed Friday's session at $113.06, up 2.47%, according to data from Benzinga Pro.

Read next: Cathie Wood continues to buy Tesla shares: Here's how much Ark Invest paid for the week's purchases< /p>

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