Is Tesla Stock a Buy After Blowout Earnings?
Tesla stock is rallying after the EV maker's Q3 profits topped estimates and CEO Elon Musk gave an upbeat outlook for next year's deliveries.
Tesla (TSLA) stock is soaring in Thursday's session, sailing to the top of the S&P 500 after the electric vehicle (EV) maker topped profit expectations for its third quarter. Tesla CEO Elon Musk's upbeat outlook for vehicle delivery growth in 2025 is also boosting sentiment on the Magnificent 7 stock.
In the three months ended September 30, Tesla's revenue increased 7.8% year over year to $25.2 billion, driven in part by a 52.4% surge in revenue in its energy generation and storage segment. Its earnings per share (EPS) were up 9.1% from the year-ago period to 72 cents.
The results were mixed compared with analysts' expectations. Wall Street was anticipating revenue of $25.4 billion and earnings of 58 cents per share, according to CNBC.
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"We delivered strong results in Q3 with growth in vehicle deliveries both sequentially and year on year, resulting in record third-quarter volumes," Tesla said. "We also recognized our second-highest quarter of regulatory credit revenues as other OEMs [original equipment manufacturers] are still behind on meeting emissions requirements."
On Tesla's conference call, CEO Elon Musk provided a "rough estimate" for vehicle delivery growth next year. "I think with our lower-cost vehicles with the advent of autonomy, something like a 20% to 30% growth next year is my best guess," he said.
Musk's outlook is well ahead of analysts' expectations for 15% growth in vehicle deliveries next year.
Is Tesla stock a buy, sell or hold?
Heading into Thursday's session, Tesla was down 14% for the year to date. And Wall Street's expectations for the consumer discretionary stock weren't too high.
According to S&P Global Market Intelligence, the average analyst target price for TSLA stock is $213.71, which is roughly in line with its October 23 close. Additionally, the consensus recommendation is a Hold.
However, there are some that say Tesla is a Buy, especially after its blowout report, including financial services firm Wedbush.
"Last night Tesla delivered an early Christmas present for investors as the bulls got a monster margin rebound and a surprisingly strong delivery outlook for 2025 which we would characterize as an Aaron Judge-like quarter and guidance," said Wedbush analyst Daniel Ives in a note this morning. "The highlight of the night was Tesla giving delivery growth for 2025 of 20%-30% vs whisper Street numbers in the 10%-12% heading into the print."
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