Tesla Stock Hits Highest in Over a Year After Strong Earnings

On Friday, Tesla's stock price hit its highest point in more than a year. This followed a substantial rise the day before, making it the best two-day performance since 2013. Investors were thrilled with the company's third-quarter results. Tesla shares jumped 2. 8% on Friday morning, reaching $267. 79. This meant the stock was on track to close at its highest since September 2023. With these gains, the stock wiped out its losses for the year and is now up about 8% in 2024. However, it still trails the Nasdaq's 24% increase. Analysts from Piper Sandler increased their price target for Tesla stock after the earnings report. They set a new 12-month prediction of $315, up from $310. This was due to expectations of higher deliveries and improved margins. On Thursday, Tesla's stock soared 22%, its second-best single-day performance since its IPO in 2010. This surge came after Tesla reported revenues of $25. 18 billion. Although this missed analysts' expectations of $25. 37 billion, it was an 8% increase from the previous year. The company also reported adjusted earnings per share of 72 cents, surpassing the average analyst estimate of 58 cents. A significant factor boosting Tesla's profit margins was $739 million from environmental regulatory credits. JPMorgan Chase analysts highlighted that these credits might not be a sustainable source of earnings and cash flow. Another boost came from $326 million in revenue from Tesla's Full Self-Driving Supervised system (FSD).

During the earnings call, CEO Elon Musk predicted that vehicle growth could reach 20% to 30% next year. He attributed this to lower-cost vehicles and advancements in autonomy. Analysts surveyed by FactSet had expected delivery growth of about 15% for 2025. Despite Musk's optimism about autonomy, he has often missed deadlines for self-driving products. Bernstein analysts noted that Tesla lags behind competitors in robotaxi technology. Musk also announced plans to start production of the Cybercab, a robotaxi with unique features, by the end of 2026. He added that Tesla would begin driverless ride-hailing in California and Texas next year, using existing cars that currently require human supervision. Musk's net worth increased by approximately $30 billion with the stock rally, bringing his total to about $274 billion. This puts him $60 billion ahead of Oracle founder Larry Ellison, who is a former Tesla board member and Musk's friend. Even with the recent gains, Tesla's stock is still about 35% below its all-time high from 2021. The company faced tough times in the first quarter of 2024, with year-over-year deliveries falling and competitors gaining market share. Competition remains fierce. In China, companies like BYD and Geely, along with newer players like Li Auto and Nio, are ramping up sales. In the U. S. , legacy automakers Ford and General Motors are stepping up their electric vehicle offerings.

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