Elon Musk's Tesla is way more than just an electric-car maker, according to Morgan Stanley.

That's why the firm says the stock can continue to climb, building on its 428% advance this year, as it transforms to a software/connected vehicle services provider -- the “entry ticket” to a much larger business.

“To only value Tesla on car sales alone ignores the multiple businesses embedded within the company, and ignores the long term value creation arising from Tesla’s core strengths, driven by best in class software and ancillary services,” wrote analyst Adam Jonas.

Tesla’s services business, which includes self-driving, GPS, entertainment options, performance upgrades and more, is expected to grow significantly over the next decade.

Current revenue from services just below $1 billion, or about 1% to 2% of all sales. Jonas believes that business will reach 6% of company sales by 2030, equating to as much as 20% of EBITDA (earnings before interest, taxes, depreciation and amortization, which is a measure of a company's overall financial performance).

Tesla’s advantage lies in its “scale and cost in EVs” which will allow the company to undercut its competition in pricing its products and expand its addressable market, according to Jonas.

New services, which will be distributed to users through software upgrades, have the potential to range from increased self-driving capabilities to upgrade content to insurance.

Jonas believes the boost in services revenue will lift shares by 22% from their current level to $540 per share. His previous target was $360.

Shares could reach $1,068 apiece in a bull case scenario. Jonas also raised his rating to overweight from equal weight.

To reach his price target, Jonas assigns the following sum-of-the-parts valuations to Tesla’s businesses.

*  Tesla Auto: $254 per share

*  Tesla Energy: $12 per share

*  Tesla Mobility/Ridesharing: $38 per share

*  Tesla Network Services: $164 per share

*  Tesla as a third-party supplier: $58 per share

Shares were higher on Wednesday after the S&P Dow Jones Indices announced on Monday that the shares will be added to the S&P 500 on Dec. 21 as part of the index’s rebalancing.

The company in the three months ended Sept. 30 posted its fifth consecutive quarterly profit, helping pave the way for its inclusion.