Bulls and Bears Unite Over Strong Tesla Q3 Earnings

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Tesla (TSLA) has had an overall impressive year, and it’s showing on both the investor and the earnings fronts.

According to Market Watch, Tesla’s blowout Q3 earnings united bulls and bears on Thursday, even amidst skepticism regarding the stock’s valuation, as well the quality of the beat persisted.

The California electric vehicle (EV) manufacturer exceeded Wall Street expectations for its third quarter in a row, amounting to a fifth straight period of both net and adjusted profit. In addition, the company reported 40% growth in sales each of those five periods. Tesla also now has over $15 billion in cash.

In a note, Toni Sacconaghi with Bernstein said “Tesla management projected a confident, growth-focused tone and nearly doubled its annual capex outlook [to between $4.5 billion and $6.0 billion.]”

Sacconaghi continued, “While calling Tesla’s stock direction near-term is a fool’s game, we do believe that at some point valuation matters. Given high expectations, we worry about any market rotation to value; market demand in 2020; the impact of forthcoming EV competition to investor sentiment (and) whether Tesla can roll out enough new models (invariably at lower price points) to sustain 30%-50% growth for several more years.”

While there are certainly questions yet to be answered about the long-term value of Tesla’s stock, there’s no denying that the company is performing well with the world’s rapid transition to sustainable transportation already underway.

Click here to see a transcript of the live earnings call and also listen to a replay of the audio.

At the time of writing, Tesla shares are worth $430.77, up 1.92% from yesterday.

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