The unexpected performance in the third quarter and Musk's optimistic expectations have driven Tesla's stock price to soar.
On October 24th, the US stock market closed with Tesla's stock price soaring 21.92%, marking the largest daily increase since May 2013, closing at $260.48 per share. Its total market value was $832.1 billion, with an overnight surge of about $150 billion, exceeding the combined market value of General Motors, Ford Motor, and Stellantis in a single day. Tesla CEO Elon Musk's net worth increased by $33.5 billion overnight.
According to Dow Jones market data, this is the second best day Tesla's stock price has ever risen, second only to the 24.4% increase on May 9, 2013.
A day ago, Tesla disclosed a financial report that exceeded expectations.
In the third quarter of 2024, Tesla achieved a revenue of 25.182 billion US dollars, a year-on-year increase of 8%; Net profit was 2.167 billion US dollars, a year-on-year increase of 17%; The gross profit margin increased to 19.8%, a year-on-year increase of about 2 percentage points; Excluding profits from other businesses and carbon credits, its automotive gross profit margin is also as high as 17.1%. Its net profit and gross profit margin levels far exceeded market expectations.
In terms of sales, Tesla delivered approximately 463000 electric vehicles globally in the third quarter of 2024, setting a new quarterly delivery record for 2024. During the same period, Tesla welcomed its 7 millionth complete vehicle offline globally on October 22nd.
Tesla CEO Elon Musk also released very optimistic expectations. He predicts that unless there are significant negative events, car sales will increase by 20% to 30% by 2025.
In addition, Tesla has finally revealed new developments in low-priced models to the market. Musk pointed out that Tesla plans to launch more affordable models starting in the first half of 2025. He also added that with incentives, the price of electric vehicles will be "below $30000, which is a key threshold".
Musk and Tesla's long-term vision is to make electric vehicles "affordable," and their low-priced models are highly sought after by investors, often triggering fluctuations in Tesla's stock price. After the Robotaxi launch event on October 10th, Tesla's stock price plummeted, and some investors pointed out that they were bearish on Tesla due to the lack of low-priced models released.
The Financial Times believes that Tesla's quarterly profit exceeded analysts' expectations, which is undoubtedly a "significant sign" of Tesla's improved business situation.
Previously, Tesla experienced several disappointing quarters due to concerns about a slowdown in global demand for electric vehicles. In terms of stock price, since reaching its peak in November 2021, Tesla's stock price has also almost halved.
Most analysts appreciate Tesla's profit margin performance and management's success in controlling costs. Many analysts quickly raised the stock's rating and target price.
Wedbush analyst Daniel Ives said, "After experiencing a turbulent 2024, bulls will cheer on the increase in profit margins this quarter." He rated Tesla stock as "buy," with a target price of $300. This means that Tesla still has 15% room for growth.
Baird analyst Ben Kallo rated the stock as a 'buy' and set a target price of $280. He mentioned Tesla's strong profit margin in the report, calling the performance "positive". Kallo also pointed out that the company is expected to launch a new low-priced car in the first half of 2025, with sales of 25000 low-priced cars expected in the fourth quarter of next year.
However, some analysts believe that the significant increase in stock prices may also be attributed to some short covering. Ed Egilinsky, Managing Director of investment firm Direxion, said, "Due to the stock being sold off before the October earnings announcement, some bearish investors believe this is more like a relief rebound because the performance is better than people's expectations." As of the end of September, Tesla's short position accounted for 2.33%.