Tesla share price surges 20% following Q3 earnings beat

We take a look at some of the key details from Tesla’s latest third quarter earnings results.

Tesla Q3 results at a glance

Tesla's (TSLA) share price jumped as much as 20% in after-hours trade following the release of its Q3 results.

Is the message here don’t bet against Elon Musk?

Or that predicting which metric the market will favour come results time is a fool’s errand?

Maybe both, or neither; and either way, today it was earnings that mattered most and on that front Tesla delivered a handsome beat against analyst expectations.

Specifically, the innovative automotive company posted $261m in GAAP operating income and $143m in GAAP net income. On a per share basis, Tesla posted adjusted EPS figures of $1.86 – according to Bloomberg.

A good result by any measure: previous analyst Q3 EPS estimates were for a loss of 24c per share.

The optimism generated from this earnings surprise was joined by a string of other positive developments.

Tesla for example, posted record production figures of 96,000. The company also delivered 97,000 vehicles during the quarter. Building on these milestones the company pointed out that:

‘Deliveries should increase sequentially and annually, with some expected fluctuations from seasonality. We are highly confident in exceeding 360,000 deliveries this year.’

Importantly, investors should be aware that the above 97,000 vehicle production figure was a shade below Musk’s more hopeful 100,000 target for the quarter.

That minor miss aside, if the incredibly bullish share price response is anything to go by, it looks as if the market is also highly confident that Tesla, or should we say Elon Musk, will deliver this time around.

Finally, it was also pointed out that Tesla’s ‘Gigafactory Shanghai [is tracking] ahead of schedule,’ with trial production having already commenced.

One blemish on stellar results

The only hiccup from today’s results? While Tesla beat on earnings, it missed on revenue, surprisingly. Here, Tesla posted Q3 revenue of $6.30bn, somewhat behind the $6.45bn revenue consensus, according to Bloomberg Data.

This was the first annual (YoY) revenue dip since 2012.

Even so, with all this considered, it will be interesting to see how analysts readjust their views (if at all) in the coming days following these latest set of quarterly results.

For now, Tesla’s after-hours share price stands at $306.00 – its highest point since February.

Tesla share price: the analyst view

All up, analysts remain mixed on Tesla's prospects. According to Bloomberg Data, 12 analysts rate it a buy, 10 rate it a hold and 15 rate it a sell. At the time of writing, the 12-month price target for Tesla’s stock stood at $254.35, well below current after-hours levels.

According to Bloomberg, New Street Research has the highest price target on Tesla of any broker, with a buy recommendation and a lofty $530.00 share price target.

Barclays, by comparison, has an underweight rating and a $150.00 per share price target on the automotive stock.

The following chart, prepared by IG Market Analyst Kyle Rodda, looks at Tesla's analyst consensus price target and offers more technical insight into the Tesla share price:


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