Tesla (TSLA) stock started rallying the next morning after the company’s Q3 2024 Earnings Call and financial update report was published on its investor relations website on Wednesday (audio and PDF below).
On Thursday, Tesla’s stock price increased by around ~22%. It surged from $213.65 to $260.48 at market close on the trading day.
On Friday, the rally continued and a TSLA share peaked at $269.19 at market close for the rest of the weekend.
– Advertisement – Tesla (TSLA) 5-day stock price graph starting Monday 21st October and ending on Friday 25th October 2024. Sudden spike is due to the company’s Q3 profit report and a positive earnings call. Tesla (TSLA) 5-day stock price graph starting Monday 21st October and ending on Friday 25th October 2024. Sudden spike is due to the company’s Q3 profit report and a positive earnings call. Credit: Google.
Tesla (TSLA) Q3 2024 Profitability
The Tesla stock surge rally is fueled by the company reporting a gross profit of $4,997 million ($4.997B) Q3 2024 which is a 20% increase compared to Q3 2023.
Tesla’s total GAAP gross margin also increased by 195 basis points (bp) from 17.9% to 19.8% year-over-year (YoY) in Q3.
Compared to Q2 2024, Tesla’s gross profit margin grew more than 9%. Tesla achieved a gross profit of $4,578 million in Q2 vs $4,997 million in Q3. So, Tesla also performed well in QoQ profit margin increase alone while other automakers are struggling to to show some profit on the balance sheet.
Tesla wrote in its profitability report:
$2.7B GAAP operating income in Q3
$2.2B GAAP net income in Q3
$2.5B non-GAAP net income1 in Q3
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Our operating income increased YoY to $2.7B in Q3, resulting in a 10.8% operating margin.YoY, operating income was primarily impacted by the following items:
+ lower cost per vehicle, including lower raw material costs, freight and duties and other one-time charges
+ growth in Energy Generation and Storage and Services and Other gross profit
+ decrease in operating expenses including cost-reduction efforts
– reduced S3XY vehicle ASP
Tesla (TSLA) Q3 2024 Financial Summary. Full report below in PDF.– Advertisement –
Audio webcast: Tesla, Inc. (TSLA) Q3 2024 Earnings Call and Financial Update.
Investor/Analyst Reactions
Wall Street took Tesla’s report of strong margins positively. Compared the legacy OEM automaker’s Tesla showed strong margins even if we remove regulatory credits from the report.
“17.1% gross margin ex-credit was a strong beat,” said Tom Narayanan, Lead Equity Analyst, Global Autos. “I do think if you take out those FSD-deffered revenue piece, you still come out with a very strong gross profit margin ex-credit,” Tom added.
RBC Capitol on Tesla: “There is growth, and if they can do it with the margin strength that they have, now folks can stop thinking about the automotive piece and margins, and start looking at what really should drive $TSLA stock, which is non-automotive things: Energy storage,… pic.twitter.com/uoI7qUhIp4
Canaccord Genuity analyst George Gianarikas on Tesla’s Q3 earnings beat: “The margins were exceptional; They continue he to show time and time again that they’re able to lower the cost of production and be the only one that can make money on EVs; Going to see $TSLA outperform.”… pic.twitter.com/Og0SwVyDp2
“The margins were exceptional; They continue to show time and time again that they’re able to lower the cost of production and be the only one that can make money on EVs,” said George Gianarikas and analyst at Canaccord Genuity.
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 stock rallied for 2 consecutive days at the NASDAQ after the company reported strong profit margins and a positive Q3 2024 Earnings Call (audio, report PDF).){kind=link}