Tesla Stock Cruises as Model 3 Hits the Street

Tesla Stock Cruises as Model 3 Hits the Street

Tesla Inc. (Nasdaq: TSLA) reported second-quarter earnings after the bell on Wednesday, beating both earnings per share and revenue expectations by a mile. TSLA stock picked up more than 2.5 percent in after-hours trading.

 

Year-to-date, Tesla stock was up 52 percent, five times the 10 percent gain in the Standard & Poor’s 500 index.

 

Tesla earnings: Q2 by the numbers. For the second quarter, Tesla reported non-GAAPlosses of $1.33 for each share of TSLA stock, less than the $1.61 per share it lost a year ago. Revenue, however, surged 120 percent to $2.79 billion. Analysts, according to FactSet, were expecting an EPS loss of $1.88 on revenue of $2.517 billion.

 

Tesla’s sky-high revenue growth is one reason the stock is a Wall Street favorite. Still, it comes at a cost.

 

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Tesla’s guidance. Every stock’s valuation depends on future expectations to some degree, but TSLA stock relies almost entirely on its future plans. That’s why in any given Tesla earnings report it’s important to know the top- and bottom-line, but arguably even more important to skip to the “outlook” section.

 

Specifically, everyone on Wall Street wanted to see the company’s updated guidance on the scale and pace of Model 3 production, which just began in July.

 

“The Model 3 provides a strong impetus for investors to remain bullish,” Chad Bockius, chief marketing officer at Vast, a company that provides big data solutions to customers in the auto industry. The car is seen as the ticket to profitability for TSLA.

 

Tesla didn’t get too deep into the weeds on Model 3 guidance, though, except to say that it remains on track for boosting its Model 3 production run rate to 5,000 per week by the end of the year, and 10,000 vehicles per week by sometime in 2018.

 

Those projections seemed to impress Wall Street.

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