Tesla Stock Soars 21% After Impressive Q3 Earnings Beat

Shares of Tesla Inc. skyrocketed 21% in after hours trading Wednesday after the world's leading maker of electric vehicles (EVs) reported a spike in profit in its third quarter earnings report that buoyed investor enthusiasm.

Tesla's Q3 earnings report released after the bell on Wall Street saw the company's share price balloon to $308.25, up a huge 21.03%, and the highest since February. The stock opened at $254.50 and traded flat through the entire day until closing. Then came the surprisingly positive Q3 earnings report.

Tesla reported Q3 revenue of $6.3 billion and adjusted earnings per share of $1.86. Analysts polled by FactSet predicted sales of $6.45 billion in Q3 while Estimize placed Tesla revenue at $6.60 billion. Estimize is a crowdsourced platform that aggregates estimates from analysts, executives, fund managers, and academics. Other Wall Street analysts were looking forward to revenue of $6.517 billion and a loss of $0.15 per share.

That Tesla reported a profit was a welcome surprise. The company revealed a profit of $1.91 per share (Non-GAAP), which was a tad below expectation for revenue but ahead of expectations for earnings.

Analysts polled by FactSet expected Tesla to report an adjusted quarterly loss of $0.46 per share. Estimize analysts expected Tesla to report an adjusted loss of $0.29 per share.

Tesla's Q3 scorecard:

• Adjusted earnings per share of $1.86 vs. expected losses of 42 cents per share
• Revenue of $6.3 billion, vs. expected $6.33 billion, according to Refinitiv consensus estimates

Tesla gave investors a pretty positive outlook for 2020. The Model Y crossover utility vehicle has had its estimated deliveries moved-up to summer 2020 from the fall, according to CEO Elon Musk. Tesla says it plans to make a limited run of its Tesla Semi truck in 2020.

Tesla's Shanghai Gigafactory 3 was the star of the Q3 presentation, however. Tesla has confirmed reports work on Giga Shanghai is progressing ahead of schedule. Tesla’s validation of media rumors to this effect was another spot of good news.

“We are already producing full vehicles on a trial basis, from body, to paint and to general assembly, at Gigafactory Shanghai," said Tesla.

"We have cleared initial milestones toward our manufacturing license and are working towards finalizing the license and meeting other governmental requirements before we begin ramping production and delivery of vehicles from Shanghai."

Tesla said Giga Shanghai was built in 10 months "and is ready for production, while it was ~65% less expensive (capex per unit of capacity) to build than our Model 3 production system in the U.S.”

An official announcement about the location of Gigafactory 4 in Europe (likely Germany) is expected to be revealed in 2021.

“We are planning to produce limited volumes of Tesla Semi in 2020 and are hoping to announce soon the location of our European Gigafactory for production in 2021,” said Tesla.