Investor's Corner
Key takeaways from Tesla’s Q3 report and Q&A with Musk

Tesla released its third quarter earnings after the closing bell on Wednesday, surprising Wall Street after posting nearly $22 million in profit in the quarter. This is in sharp contrast to previous analyst expectations polled by FactSet which expected Tesla to report a GAAP loss of 53 cents a share in the third quarter, and an adjusted loss per share of 22 cents, narrower than the adjusted loss of 58 cents a share in the year-ago period.
Estimize, which crowdsources estimates from buy-side and sell-side analysts, fund managers, hedge funds and academics, expected Tesla to report an adjusted loss per shares of 4 cents. Estimates on E-Trade were between a loss of 4 and 7 cents. Noted Tesla Analyst Ben Kallo of Baird, expected non-GAAP earnings per share of $0.72.
All in all, given all these numbers, Wall Street was basically expecting a breakeven quarter.
Revenue
Total reported Q3 GAAP revenue was $2.30 billion, up 145% from Q3 2015. Tesla matched the higher end of the expectations. Another good news for the stock.
MarketWatch, in a live blog, called it a “Tesla earnings shocker – Actual profit”. Similarly, Bloomberg was surprised and posted the headline “Tesla Posts Rare Quarterly Profit as Musk Readies for SolarCity. The Wall Street Journal landed the news on its front page with the headline “Tesla Shares Jump after Posting Best Quarterly Sales Ever.”
I believe investors and analyst expectations were so low, that the clearly huge profit numbers were a “shock” to the market. This is Tesla first profitable quarter since the third quarter of 2014, a full 2 years ago, when Tesla eked out a minuscule profit of 2 cents a share. Tesla had reported losses ever since.
Stock Reaction (after hours)
The stock ended the day regular session at $202.24, down 10c for the day. The stock is down heavily from the $267 in early April, around the time Tesla started taking reservations for the Model 3.
The initial reaction of traders was very positive, as right after the quarterly results were published, Tesla shares rose as high as $215, about 7% in after-hours trading, with very high volume.

Source: optionhouse.com
The conference call did not change much as the after-hour session closed at $212, or up about 5% so we would expect a higher opening on Thursday.
Analysts polled by TipRanks have an average rating of hold on the stock, with an average stock price target of $199.13, about even from current levels at the close. These levels may well be adjusted tomorrow on the upside 5-7%, given the huge beat on expectations.

Source: TipRanks
Conference Call Q&A Top Quotes
Besides the financial report, investors wanted to hear about future production, which they are counting on to justify the still fairly high Tesla share price.
In the Tesla Third Quarter 2016 Update letter, Tesla noted that they “achieved record production levels in Q3, raising to 25,185 vehicles for an increase of 37% from Q2, and an increase of 92% from Q3 last year.” Also, Tesla “maintained guidance of 50,000 new vehicle deliveries for the second half of 2016 […] despite the challenges of winter weather and the holiday season.”
Best Quarter Ever
At the start of the conference call Elon Musk called the “quarter the best ever,” with fourth quarter expected to be great as well, with Q4 to be profitable even including non cash stock based expenses.
Musk called it “One of the best moments in Tesla history.” Elon also addressed rumors of widespread discounting as reason for profit: called the, “absolutely false,” and pointed out that “vehicle profitability increased without ZEV credits.”
Model 3
Elon reiterates volume production for Model 3 in second half of next year. The terms that the company are getting for suppliers is much better. Model 3 production and logistics are way faster, says Musk. He also forecasts an increase in gross margin, even after big beat on that metric in the quarter just reported. As a result, Elon does say he doesn’t expect to raise more capital in Q1 2017, though he won’t rule it out.
Musk dodged a question about Model 3 deposits: “That’s not something we comment on and not something that deserves merit,” he says.
Elon listed his 3 top priorities: Model 3 production schedule, advancing autopilot software, and ramp up of 100 kWh production line. After the call, Musk will be at the 100 kWh production line as “demand is high,” he says.
SolarCity
The SolarCity deal about “cash neutral” for Tesla, Musk says. If this is indeed found to be true, it may help with the approval of the deal coming up soon for vote by the shareholders.
“It’s important to have ‘tight control’ of solar panels production in order to have a ‘beautiful’ product. Confident it would have the best product at the best price, and one that would look better as well,” Musk says.
The solar roof product that will be offered by combined Tesla-SolarCity will “look better than a normal roof” and will be aimed at new houses being built and homes where the roof needs to be replaced anyway. Musk said that “People will be surprised by the product to be unveiled on Friday. It exceeded my expectation,” he says.
Full Autonomy
Elon said that “radar is moving from supplemental to primary sensor. Vision is still the main thing, but radar can be primary so you can take action based on radar, similarly as you can take action based on vision.” Elon also called out MobilEye for “issuing bullshit” on radar vs. vision argument in autonomous driving.
According to Musk, “Teslas on Autopilot are logging 1.5 million miles per day through all kinds of road conditions and weather all across the world.”
All in all no real surprises out of the conference call, and the good thing is that the stock held steady during the call. Definitely a good day for Tesla.
Investor's Corner
Tesla could save $2.5B by replacing 10% of staff with Optimus: Morgan Stanley
Jonas assigned each robot a net present value (NPV) of $200,000.

Tesla’s (NASDAQ:TSLA) near-term outlook may be clouded by political controversies and regulatory headwinds, but Morgan Stanley analyst Adam Jonas sees a glimmer of opportunity for the electric vehicle maker.
In a new note, the Morgan Stanley analyst estimated that Tesla could save $2.5 billion by replacing just 10% of its workforce with its Optimus robots, assigning each robot a net present value (NPV) of $200,000.
Morgan Stanley highlights Optimus’ savings potential
Jonas highlighted the potential savings on Tesla’s workforce of 125,665 employees in his note, suggesting that the utilization of Optimus robots could significantly reduce labor costs. The analyst’s note arrived shortly after Tesla reported Q2 2025 deliveries of 384,122 vehicles, which came close to Morgan Stanley’s estimate and slightly under the consensus of 385,086.
“Tesla has 125,665 employees worldwide (year-end 2024). On our calculations, a 10% substitution to humanoid at approximately ($200k NPV/humanoid) could be worth approximately $2.5bn,” Jonas wrote, as noted by Street Insider.
Jonas also issued some caution on Tesla Energy, whose battery storage deployments were flat year over year at 9.6 GWh. Morgan Stanley had expected Tesla Energy to post battery storage deployments of 14 GWh in the second quarter.
Musk’s political ambitions
The backdrop to Jonas’ note included Elon Musk’s involvement in U.S. politics. The Tesla CEO recently floated the idea of launching a new political party, following a poll on X that showed support for the idea. Though a widely circulated FEC filing was labeled false by Musk, the CEO does seem intent on establishing a third political party in the United States.
Jonas cautioned that Musk’s political efforts could divert attention and resources from Tesla’s core operations, adding near-term pressure on TSLA stock. “We believe investors should be prepared for further devotion of resources (financial, time/attention) in the direction of Mr. Musk’s political priorities which may add further near-term pressure to TSLA shares,” Jonas stated.
Investor's Corner
Two Tesla bulls share differing insights on Elon Musk, the Board, and politics
Two noted Tesla bulls have shared differing views on the recent activities of CEO Elon Musk and the company’s leadership.

Two noted Tesla (NASDAQ:TSLA) bulls have shared differing views on the recent activities of CEO Elon Musk and the company’s leadership.
While Wedbush analyst Dan Ives called on Tesla’s board to take concrete steps to ensure Musk remains focused on the EV maker, longtime Tesla supporter Cathie Wood of Ark Invest reaffirmed her confidence in the CEO and the company’s leadership.
Ives warns of distraction risk amid crucial growth phase
In a recent note, Ives stated that Tesla is at a critical point in its history, as the company is transitioning from an EV maker towards an entity that is more focused on autonomous driving and robotics. He then noted that the Board of Directors should “act now” and establish formal boundaries around Musk’s political activities, which could be a headwind on TSLA stock.
Ives laid out a three-point plan that he believes could ensure that the electric vehicle maker is led with proper leadership until the end of the decade. First off, the analyst noted that a new “incentive-driven pay package for Musk as CEO that increases his ownership of Tesla up to ~25% voting power” is necessary. He also stated that the Board should establish clear guidelines for how much time Musk must devote to Tesla operations in order to receive his compensation, and a dedicated oversight committee must be formed to monitor the CEO’s political activities.
Ives, however, highlighted that Tesla should move forward with Musk at its helm. “We urge the Board to act now and move the Tesla story forward with Musk as CEO,” he wrote, reiterating its Outperform rating on Tesla stock and $500 per share price target.
Tesla CEO Elon Musk has responded to Ives’ suggestions with a brief comment on X. “Shut up, Dan,” Musk wrote.
Cathie Wood reiterates trust in Musk and Tesla board
Meanwhile, Ark Investment Management founder Cathie Wood expressed little concern over Musk’s latest controversies. In an interview with Bloomberg Television, Wood said, “We do trust the board and the board’s instincts here and we stay out of politics.” She also noted that Ark has navigated Musk-related headlines since it first invested in Tesla.
Wood also pointed to Musk’s recent move to oversee Tesla’s sales operations in the U.S. and Europe as evidence of his renewed focus in the electric vehicle maker. “When he puts his mind on something, he usually gets the job done,” she said. “So I think he’s much less distracted now than he was, let’s say, in the White House 24/7,” she said.
TSLA stock is down roughly 25% year-to-date but has gained about 19% over the past 12 months, as noted in a StocksTwits report.
Investor's Corner
Cantor Fitzgerald maintains Tesla (TSLA) ‘Overweight’ rating amid Q2 2025 deliveries
Cantor Fitzgerald is holding firm on its bullish stance for the electric vehicle maker.

Cantor Fitzgerald is holding firm on its bullish stance for Tesla (NASDAQ: TSLA), reiterating its “Overweight” rating and $355 price target amidst the company’s release of its Q2 2025 vehicle delivery and production report.
Tesla delivered 384,122 vehicles in Q2 2025, falling below last year’s Q2 figure of 443,956 units. Despite softer demand in some countries in Europe and ongoing controversies surrounding CEO Elon Musk, the firm maintained its view that Tesla is a long-term growth story in the EV sector.
Tesla’s Q2 results
Among the 384,122 vehicles that Tesla delivered in the second quarter, 373,728 were Model 3 and Model Y. The remaining 10,394 units were attributed to the Model S, Model X, and Cybertruck. Production was largely flat year-over-year at 410,244 units.
In the energy division, Tesla deployed 9.6 GWh of energy storage in Q2, which was above last year’s 9.4 GWh. Overall, Tesla continues to hold a strong position with $95.7 billion in trailing twelve-month revenue and a 17.7% gross margin, as noted in a report from Investing.com.
Tesla’s stock is still volatile
Tesla’s market cap fell to $941 billion on Monday amid volatility that was likely caused in no small part by CEO Elon Musk’s political posts on X over the weekend. Musk has announced that he is forming the America Party to serve as a third option for voters in the United States, a decision that has earned the ire of U.S. President Donald Trump.
Despite Musk’s controversial nature, some analysts remain bullish on TSLA stock. Apart from Cantor Fitzgerald, Canaccord Genuity also reiterated its “Buy” rating on Tesla shares, with the firm highlighting the company’s positive Q2 vehicle deliveries, which exceeded its expectations by 24,000 units. Cannacord also noted that Tesla remains strong in several markets despite its year-over-year decline in deliveries.
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