Post-Earnings Surge Has Led Tesla Shares To Their Highest Close In 13 Months.

(VOR News) – Tesla’s stock continued to rise on Friday, reaching its best close in almost a year, even though analysts and investors continued to laud the electric vehicle company’s third-quarter results.

This happened the day after the stock experienced its biggest increase since 2013. Tesla’s stock rose 2.8% in the early hours of Friday, hitting $267.79. As a result, the stock is poised to reach its highest closing price since September 2023.

The stock is now up about 8% in 2024 after reversing its annual loss due to two days of gains. It still lags behind the Nasdaq, though, which has risen by 24%.

The most recent analysts to raise their price target were those at Piper Sandler, following the release of the earnings report on Wednesday.

The business declared that it was raising its estimation of the 12-month stock price from $310 to $315 “to reflect higher deliveries and higher margins.” Prior to raising the rating, the business had given the stock a buy rating.

Tesla shares rose 22% Thursday, their second-largest gain since its 2010 IPO.

This followed Tesla’s announcement of $25.18 billion in revenue, which was 8 percent higher than the previous year’s data but nearly the same as $25.37 billion experts had predicted.

Tesla announced earnings per share of 72 cents after accounting for inflation, exceeding the average analyst projection of 58 cents.

Tesla’s profit margins increased as a result of $739 million in revenue from environmental regulatory credits. According to a report by JPMorgan Chase analysts, these credits were a “potentially unsustainable driver” of cash flow and earnings throughout the study period.

Another element that improved performance was the company’s Full Self-Driving Supervised system, which generated $326 million in revenue.

Elon Musk, the CEO, said during the earnings call that his “best guess” is that the rise of cars will reach 20% to 30% in the upcoming year. He attributed his prediction to the “adventure of autonomy” and more affordable automobiles. According to the analysts surveyed by FactSet, deliveries would increase by almost 15% in 2025.

However, in terms of autonomy, Musk has consistently fallen short of his own deadlines for product launches, even though he has made every effort. In a report following the release of the company’s earnings, Bernstein analysts noted that Musk had a “long history of being overly optimistic about FSD.”

They said the survey found Tesla “continues to lag well behind competitors” in robot axis production.

During the call, Musk also mentioned that Tesla plans to start producing its Cybercab, which was only recently made available to the general public. The Cybercab is a robot axi without pedals or a steering wheel that has butterfly doors.

In the upcoming year, he stated, Tesla would start providing autonomous ride-hailing services in the states of Texas and California. Without a human driver on hand to steer or brake at any time, the company’s current vehicles are not yet safe to operate.

According to Forbes, Musk’s paper fortune increased by more than $30 billion as a result of the two-day rally, bringing his total net worth to over $274 billion. He is now sixty billion dollars richer than Oracle founder Larry Ellison, who is currently the second richest person in the world. Ellison is a personal friend of Musk and a previous member of the Tesla board of directors.

In spite of this, Tesla’s stock is still about 35% below its peak, which was reached in 2021. The corporation went through a challenging time in the first three months of 2024 as deliveries fell from the previous year and buyers shifted to electric vehicles from a number of competitors.

There are still risks associated with competition.

In recent years, a number of Chinese businesses, including BYD and Geely, as well as a new generation of automakers, such as Li Auto and Nio, have seen an increase in sales.

Even though Ford and General Motors have backed out of their earlier promises to electrify their cars, traditional automakers are starting to sell more electric cars in the US

SOURCE: CNBC

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