Tesla Motors stock continued to climb Thursday after the automaker beat analysts' expectations for the second quarter.
With less than two hours left in the trading, the stock has climbed more than 20%, to about $155. That pushed Tesla’s market capitalization to about $18 billion.
On Wednesday, the Palo Alto company reported an operating profit of $26 million, excluding one-time expenses, and ended the quarter with nearly $750 million in cash and no government debt.
The automaker posted an overall $30.5-million loss in the second quarter – a fraction of the $105.6-million loss from the same quarter last year, when it was beginning production of its all-electric Model S. Prices for the luxury sedan start at $69,900 before the $7,500 federal tax credit, and can rise to more than $100,000 with modifications.
Analysts at Barclays and Jefferies both lauded the company’s results.
A note from Jefferies analyst Elaine Kwei said the market “couldn’t have asked for a better report” from Tesla, noting the company delivered 5,150 Model S sedans in North America, which beat the firm’s estimate of 5,000. The automaker boosted production in the second quarter from 400 to 500 sedans a week.
Tesla also beat estimates for total revenue – $552 million compared with Jefferies’ predicted $530 million. Jefferies rated the stock worth buying, and adjusted its price target to $160, up from $130.
Barclays tempered its reaction. The firm downgraded Tesla stock, calling it “fairly valued,” setting a price target of $141. A report from Barclays said analysts wanted to recognize “the risks inherent in the company’s ramp-up, as well as the option value of potentially becoming a large, mass-market automaker.”
But if the company's Model S sedan continues to sell well, and it has similar success with a planned sport utility vehicle, the Model X, the stock could have vast upside potential, according to Barclays.
"The bull argument for the stock could be that the CEO, Elon Musk, is the next Henry Ford – i.e. mass market success would be assured," the Barclays report said.