Tesla's Charging Ahead: And changing the automotive industry
Tesla just released its third-quarter earnings report and it's a mixed signal for investors. While the electric vehicle (EV) maker beat revenue expectations, it fell short on earnings per share. However, don't hit the brakes just yet! Exciting developments could still increase Tesla's share price in the long run.
One of the biggest news around Tesla is the ongoing testing of its full self-driving (FSD) beta software. It's still in its early stages but successful implementation could shake up the automotive industry and give Tesla a massive competitive edge. Imagine a world where your Tesla drives you to work while you relax or catch up on emails in the back. This comes with Tesla's continued expansion into new markets and energy solutions which have investors keeping a close eye on the company.
Key Highlights of Tesla’s Q3 Earnings
Here’s a quick summary:
- Revenue Growth: Tesla reported $24.32 billion in revenue, beating analysts’ forecasts of $23.39 billion. This indicates continued demand for Tesla’s EVs, even as competition intensifies.
- Earnings Per Share (EPS): Tesla posted EPS of $0.73, missing the expected $0.80. Price reductions and higher operating costs contributed to the company missing expectations, potentially impacting profitability in the near term.
- Vehicle Deliveries: Tesla achieved a record-high delivery of 430 000 vehicles, reflecting strong production capacity.
- Free Cash Flow: Tesla generated $1 billion in free cash flow, showing strong operational cash generation and positioning it well for future investments.
Analysis and Outlook
Tesla’s share price has climbed 25% since its Q3 earnings report. It now faces a critical test at the $270 resistance level, a point where previous rallies in September 2023 and July 2024 stalled. Wall Street’s positive response includes upgrades from analysts like Stifel, which raised its target to $287, and Piper Sandler, which increased its target to $315, reflecting optimism about Tesla’s growth in EVs and potential in autonomous driving. Historically, Tesla's share price has shown strong gains in the months following high performance days with analysts often raising targets that support further upward momentum.
Disclaimer:
*Any opinions, views, analysis or other information provided in this article is provided by BCS Markets SA trading as BROKSTOCK as general market commentary and should not be viewed as advice according to the FAIS Act of 2002. BCS Markets SA does not warrant the correctness, accuracy, timeliness, reliability or completeness of any information provided by third parties. You must rely upon your judgement in all aspects of your investment decisions and all decisions are made at your own risk. BCS Markets SA and any of its employees shall not be responsible for and will not accept any liability for any direct or indirect loss including without limitation any loss of profit which may arise directly or indirectly from use of the market commentary. The content contained within the article is subject to change at any time without notice. BCS Markets SA is an authorised financial services provider FSP No. 51404.
** This article was prepared by BROKSTOCK analyst Maboko Seabi
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