Tesla is a magnificent electric vehicles automaker. However, its valuations have been tough for many automotive investors to comprehend.
Despite that, its stock has cracked the $1,000 level recently. We previously highlighted that its strong momentum could take us there.
We discuss what investors should consider after its FQ3 report card. We also explain whether the stock is a buy now.
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In our previous article: ” Can Tesla Stock Reach $1,000 As Momentum Returns? ” we said its strong momentum could bring it there. We also added that many bearish investors don’t accord sufficient consideration to Tesla (NASDAQ: TSLA ) stock’s incredible momentum. Consequently, it led them to adopt a surprisingly bearish stance on its stock. Therefore, these investors must be left stunned by Tesla stock cracking the $1,000 ceiling recently. However, we were not surprised, as Tesla stock has been gaining momentum since H2’21 started. If only these investors paid close attention to its price action and trend analysis that we often highlighted.
We also informed readers that Tesla has been improving its operating leverage incredibly fast. We informed readers to value Tesla on its operating earnings moving forward instead of focusing solely on its revenue growth. The company’s gangbuster adjusted earnings growth in FQ3’21 also demonstrated that.
We discuss what investors should look out for as Tesla stock marked a new all-time high (ATH) post-FQ3’s report card. TSLA Stock YTD Performance
TSLA stock Vs. legacy peers YTD performance (as of 25 October 21). TSLA stock Vs. Chinese EV peers YTD performance (as of 25 October 21).
Tesla stock started the year strongly as it raced to a YTD return of more than 20% by January. However, like its Chinese EV peers, NIO (NYSE: NIO ), XPeng (NYSE: XPEV ), and BYD ( OTCPK:BYDDF ), the stock was battered during the growth-to-value rotation. As a result, the stock’s upward momentum quickly fizzled out, and its YTD return went into the red by March. In contrast, its legacy peers’ stocks maintained their strong upward momentum. For example, Ford (NYSE: F ) and General Motors (NYSE: GM ) stocks continued to gain through June as their momentum also spiked on the release of their electrification roadmap.
On the other hand, Tesla stock struggled to gain traction from March to May. However, those two months also proved to be a transitory consolidation phase for the stock. Nevertheless, the stock has quickly regained its upward momentum since May. By August, the stock has recovered all its losses for the year.
At the moment, the stock’s YTD gain of 45.2% has already outperformed GM stock’s 38.7% gain. It also clearly leads the SPDR S&P 500 ETF (NYSEARCA: SPY ) and the Invesco QQQ ETF (NASDAQ: QQQ ). Moreover, it has also outperformed NIO and XPEV stocks as the Chinese BEV makers have struggled for traction.
TSLA stock still trails F stock’s 82% YTD gain, as well as BYD stock’s 49% YTD gain. Nonetheless, TSLA stock has made a sensational recovery against the bears who wanted to see it crash and burn. We think much of it can be attributed to the stock’s incredible momentum. Tesla Annualized Production Run Rate Exceeded 1M Units
Tesla LTM total automotive revenue. Data source: Company filings Tesla quarterly automotive revenue by segment. Data source: Company filings
Tesla indeed reported another incredible quarter of results. We shouldn’t be surprised since the company reported a record number of deliveries in Q3 in early October. Tesla has already delivered 627K vehicles in the first nine months of 2021. Tesla deliveries by quarter. Data source: Company filings Tesla FQ4 share of total deliveries. Data source: Company filings
The upcoming FQ4 has also seasonally been the strongest quarter for Tesla over the last five years. Therefore, we think Tesla looks set to reach between 900K to 1M deliveries for FY21. Moreover, despite the supply chain shortages besetting the other automakers, Tesla’s production capacity has proven remarkably resilient. CFO Zachary Kirkhorn emphasized that the company has already exceeded ” an annualized production run rate of over 1 million cars towards the end of the quarter.”
Even Volkswagen AG ( OTCPK:VWAGY ) chairman Herbert Diess also applauded Tesla for its achievements in production. Moreover, it showed that Tesla’s advances and technological capability in software have often been misunderstood and understated. Diess emphasized: One example for […]