On Thursday, EV Leader Tesla (TSLA, Financial) shares soared by 18%, marking one of its largest single-day gains in recent years, following a robust third-quarter earnings report that smashed analysts’ expectations on the bottom line but slightly missed the revenue forecast. However, The electric carmaker, led by Elon Musk, showcased stronger-than-anticipated auto margins and provided optimistic guidance for 2025, pushing shares dramatically higher.
Investors are overwhelmed by the earnings beat, with gross margins climbing to 19.8%, surpassing the expected 16.8%. This significant increase reflects a keen investor focus on Tesla’s profitability metrics, particularly in light of the company’s challenging start to the year. Earlier in 2024, Tesla was struggling with declining deliveries and waning demand in China, sparking concerns about the health of its core automotive business.
The substantial 18% intraday rise is Tesla’s most notable since April and represents the second-largest since March 2021, when shares traded approximately $50 below their current levels. This resurgence in Tesla’s stock price underscores renewed investor confidence in the automaker’s financial health and market position.
Analysts have reacted positively to the financial results, which have alleviated some doubts surrounding Tesla’s performance and future prospects. The company’s ability to exceed market expectations and demonstrate a strong fiscal trajectory has provided a substantial boost to investor sentiment, suggesting potential for sustained growth as Tesla continues to navigate the competitive and rapidly evolving automotive industry.
This article first appeared on GuruFocus.
