Tesla shares rise to highest in over a year after Q3 earnings

A day after its sharpest rally since 2013, Tesla’s stock on Friday headed for its highest close in more than a year as investors and analysts continued to applaud the electric vehicle company’s third-quarter results.

Tesla shares rose 2.8% on Friday morning to $267.79, putting the stock on pace for its highest finish since September 2023. With the two days of gains, the stock erased its loss for the year and is now up about 8% in 2024, still trailing the Nasdaq’s 24% increase.

Analysts at Piper Sandler were the latest to bolster their price target following Wednesday’s earnings report. The firm, which already had a buy rating on the stock, said it was increasing its 12-month price stock prediction to $315 from $310 “to reflect higher deliveries and higher margins.”

Tesla shares soared 22% on Thursday, their second-best performance since the company’s IPO in 2010. That came after Tesla reported revenue of $25.18 billion, which just missed analysts’ expectations of $25.37 billion, but was up 8% compared with a year earlier. Tesla reported earnings per share of 72 cents adjusted, topping the average analyst estimate of 58 cents.

Tesla’s profit margins were boosted by $739 million in revenue for environmental regulatory credits, which JPMorgan Chases analysts noted in a report were a “potentially unsustainable driver” of earnings and cash flow. Results were also boosted by $326 million in revenue from FSD, the company’s Full Self-Driving Supervised system. 

CEO Elon Musk said on the earnings call that his “best guess” is that vehicle growth will reach 20% to 30% next year, citing lower-cost vehicles and the “advent of autonomy.” Analysts surveyed by FactSet were expecting delivery growth of about 15% for 2025.

Musk also said on the call that Tesla plans to start production of its recently unveiled Cybercab, a robotaxi with butterfly doors and no steering wheel or pedals, by the end of 2026. He said Tesla would conduct driverless ride-hailing in California and Texas next year in its existing cars, which are not currently safe to use without a human driver ready to steer or brake at any time.

With the two-day rally, Musk has now increased his paper wealth by roughly $30 billion, bringing his total net worth to about $274 billion, according to Forbes. That puts him $60 billion ahead of the world’s second-richest person, Oracle founder Larry Ellison, who is a former Tesla board member and a good friend of Musk.

Still, Tesla’s stock remains about 35% below its all-time high reached in 2021. The company had a brutal first quarter of 2024, with year-over-year deliveries falling and consumers flocking to EVs from a host of competitors.

The competitive risks remain.

In China, companies such as BYD and Geely, along with a new generation of automakers such as Li Auto and Nio, have been ramping up sales. In the U.S., legacy automakers Ford and General Motors are starting to sell more electric vehicles, despite walking back prior electrification commitments.

When it comes to autonomy, Musk has consistently missed his own deadlines for getting products to market. Bernstein analysts wrote in a note after earnings that Musk has a “long history of being overly optimistic about FSD,” adding that research shows “Tesla continues to lag well behind competitors” on robotaxis.

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