What happened

Shares of Tesla (NASDAQ:TSLA) jumped on Tuesday, rising 6.5% as of 11:10 a.m. EST.

The gain follows one analyst's decision to significantly increase his 12-month price target for the stock based on the company's recent execution and his expectations for more sharp sales growth from the electric-car company in the coming years.

Tesla vehicles outside of the company's factory in Fremont, California

Image source: The Motley Fool.

So what

New Street analyst Pierre Ferragu gave Tesla stock an $800 12-month price target on Tuesday. This is up from his previous 12-month price target of $530. Supporting the stock's 80% gain over the last year has been the company's "technological dominance, strong sustained demand, Tesla's ability to execute," said Ferragu in a note to investors. 

Looking ahead, Ferragu thinks Tesla's annual deliveries can increase from a run rate of about 450,000 today to 2 million to 3 million units by 2025. In addition, the analyst believes the company will boast "industry leading margins."

Now what

Tesla stock's wild gain recently means investors will be watching closely when the automaker reports fourth-quarter results on Jan. 29. Investors will be looking for another profitable quarter and guidance for more strong growth in deliveries in 2020.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.