Tesla adds $13 billion in market value after first-quarter report reveals surprise profit
- Tesla shares spiked as much as 9% on Thursday after the automaker's first-quarter report topped expectations for earnings and revenue.
- The early-trading bounce added as much as $13 billion to Tesla's market value.
- The company highlighted a slew of positive developments, from its 2020 delivery forecast topping 500,000 to Model Y deliveries sitting "significantly ahead of schedule."
- Some analysts aren't convinced the company is out of the woods just yet. It's "startling" to see Tesla stock trade near pre-virus highs as the global economy tanks and the coronavirus' economic threat looms, JPMorgan wrote Thursday.
- Watch Tesla trade live here.
Tesla announced first-quarter results on Wednesday afternoon that topped analyst expectations and pushed shares to their highest levels since coronavirus sell-offs began.
The automaker posted better-than-expected revenue for the period and notched a quarterly profit when analysts expected a loss. Tesla sees demand rebounding in China and expects total deliveries to surpass 500,000 this year despite the economic slump and factory shutdowns.
Tesla stock soared as much as 9% in early Thursday trading, adding more than $13 billion to the company's market value.
Here are the key numbers:
Revenue: $5.99 billion, versus the $5.81 billion estimate
Adjusted earnings per share: $1.24, versus the -34 cents estimate
Capital expenditure: $455 million, up 63% year-over-year
"While many other companies are cutting back on investment, we are doing the opposite. We are absolutely pedal to the metal on new products and expanding the company," CEO Elon Musk said in a call with analysts transcribed by Sentieo.
The automaker's positive results follow the shutdown of its main factories through the start of the year. The coronavirus pandemic and related quarantine orders forced Tesla to temporarily halt production at its China plant before closing its flagship Fremont, California, factory in late March. Though the Shanghai location has reopened, it "remains uncertain" when the California plant can return to peak capacity, the company said.
Model Y deliveries began in the first quarter and stood "significantly ahead of schedule," the company said. The latest model is the first to immediately turn a profit in its first quarter of production, Tesla added.
While the report served as "an ostensibly sharp earnings beat," analysts at JPMorgan are wary that Tesla shares may be too high for their own good. Wall Street already expected a sizable increase in deliveries through 2020, the bank said. The second delay of Tesla's Semi truck to 2021 suggests the firm's stock price might reflect too-rosy a recovery from the coronavirus' fallout.
"It is startling to us that TSLA shares are again trading at $800 (and as high as $870 in the aftermarket Wednesday), a price which they had never before commanded until February 13, 2020, just prior to the market peak, given that a lot has changed for the world, for the market, and for Tesla in the short time since," the JPMorgan team led by Ryan Brinkman wrote Thursday.
JPMorgan rates Tesla "underweight" and holds a December 2020 price target of $240 per share.
Tesla closed at $800.51 on Wednesday, up 93% year-to-date.
The automaker has eight "buy" ratings, 14 "hold" ratings, and 15 "sell" ratings from analysts, according to Bloomberg.
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