Tesla’s stock surged to a 13-month high after a strong earnings rally, making investors and analysts excited about the electric vehicle company’s performance in the third quarter of 2024. Tesla shares rose by 2.8% on Friday morning, reaching $267.79, which is the highest level seen since September 2023.
Following the positive earnings report, analysts at Piper Sandler raised their price target for Tesla stock to $315 from $310. They cited higher deliveries and margins as the reasons for their optimistic outlook. The company reported revenue of $25.18 billion, slightly below analysts’ expectations but still an 8% increase compared to the previous year. Tesla also reported earnings per share of 72 cents, surpassing the average analyst estimate of 58 cents.
One of the factors contributing to Tesla’s profit margins was the $739 million in revenue generated from environmental regulatory credits. However, JPMorgan Chase analysts raised concerns about the sustainability of this revenue source. Additionally, the company saw $326 million in revenue from its Full Self-Driving Supervised system.
During the earnings call, CEO Elon Musk expressed confidence in Tesla’s future growth, estimating a 20% to 30% increase in vehicle production next year. He highlighted the importance of lower-cost vehicles and the advancement of autonomy in driving this growth. However, analysts remain cautious as Musk has a history of missing deadlines related to autonomous driving technology.
Musk also announced plans to begin production of the Cybercab, a futuristic robotaxi, by the end of 2026. Tesla aims to initiate driverless ride-hailing services in California and Texas next year, despite the current safety concerns surrounding autonomous vehicles.
Following the two-day stock rally, Elon Musk’s net worth increased by approximately $30 billion, making him one of the wealthiest individuals globally. Despite this success, Tesla’s stock is still 35% below its all-time high in 2021. The company faced challenges in the first quarter of 2024, with decreased deliveries and growing competition from other electric vehicle manufacturers.
In China, companies like BYD and Geely, as well as newer players such as Li Auto and Nio, are gaining traction in the EV market. In the U.S., traditional automakers Ford and General Motors are increasing their electric vehicle offerings, posing a competitive threat to Tesla.
As Tesla continues to navigate through evolving market dynamics and technological advancements, investors are closely monitoring the company’s performance and future growth prospects. Elon Musk’s ambitious vision for Tesla’s role in the electric vehicle industry will be a key driver of the company’s success in the years to come.
