Shares of Tesla (TSLA) surged in trading on Thursday after the EV major’s Q3 earnings blew past estimates. In addition, Tesla confirmed that its much-anticipated, cheaper electric vehicle is on track for production in the first half of next year
TSLA Projects Optimistic Vehicle Volume Outlook
Furthermore, on the company’searnings call TSLA’s CEO, Elon Musk, issued an optimistic outlook for the company’s vehicle volume growth. Musk expects vehicle volumes to grow in the range of 20% to 30% next year, though he cautioned it as a “best guess.” Meanwhile, the company expects to achieve “slight growth” in vehicle deliveries this year.
Musk Gives an Update on Cybercab
One of the key highlights from the call was Musk’s update on Cybercab, which is expected to reach volume production by 2026. The company aims to produce 2 million Cybercabs annually once full-scale production begins, positioning it as a major player in the electric vehicle market. In addition to Cybercab, Musk added that Tesla is committed to rolling out autonomous vehicles.
In fact, Musk revealed that the company is producing about 35,000 autonomous vehicles per week, and although fully autonomous driving without human intervention is not yet available, the progress is notable. Furthermore, by 2025, Tesla aims to offer driverless ride-hailing services in states like Texas and California.
Wedbush Analyst Reiterates a Buy on TSLA
Following the Q3 results, Wedbush analyst Daniel Ives remained upbeat about the company and described the company’s margin performance as an “Aaron Judge-like” achievement, as it significantly outperformed Wall Street expectations. Notably, TSLA’s automotive gross margin (excluding credits) outperformed analysts’ expectations by 200 basis points.
According to the analyst, this margin beat indicates that TSLA is focusing on profitability while balancing the company’s future growth plans. Furthermore, Ives stated that this is a clear indication that Tesla is managing to expand its margins, even as it navigates its transition into artificial intelligence and full self-driving (FSD) technology.
Ives has a Buy rating and a price target of $300 on TSLA stock, implying an upside potential of 20.1%.
Is Tesla a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Hold consensus rating on TSLA stock based on 11 Buys, 16 Holds, and eight Sells assigned in the past three months, as indicated by the graphic below. After a 15.4% surged over the past year in its share price, the average TSLA price target of $207.83 per share implies a 16.8% downside risk.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
