Credit：Tesla
Musk’s net worth soared by $33.5 billion to $270.3 billion Thursday, the third biggest single-day dollar rise for him, according to Bloomberg Billionaires Index. The shocking increase in net worth cemented Musk’s leadership among billionaires. As of Thursday’s close, Musk’ wealth was $61 billion more than that of Amazon founder Jeff Bezos as the second wealthiest people in the world.
As a co-founder of seven companies, Musk these years is well-known for his pursuit of autonomous driving, artfiicial intelligence (AI) and humanoid robots.Tesla stock and options account for about three-quarters of his personal wealth, and he also holds large stakes in SpaceX, social media platform X and AI startup xAI.
Musk’s wealth ballooned as Tesla shares on heels of a blowout quarter. Shares settled 21.9% higher Thursday, the biggest daily percentage gain since May 2013, wiping out losses following the decline for five sessions in a row to the lowest close for more than six weeks.
Tesla reported the earnings beat following the miss for fourth straight quarter. The non-GAAP diluted earnings per share (EPS) gained around 9.1% year-over-year (YoY) to $0.72 for the third quarter, whereas analysts projected $0.6 with a YoY decrease of 9.1%. The operating income surged YoY 54% to $2.72 billion, compared with analysts estimated $19.6 billion. The operating margin increased 323BPs from a year ago to 10.8%, topping analysts’ expectation of 8%.
Tesla said the profitability continued to be weighed by reduced vehicle average selling price (ASP) amid the price war at the EV sector. In addition to the gross profit growth of the energy business, the profitability was also buoyed by lower cost per vehicle, including lower raw material costs, freight and duties and other one-time charges, higher Full Self-Driving (FSD) software revenue recognition for releases related to Cybertruck and certain features such as Actually Smart Summon, increase in vehicle deliveries and higher regulatory credit revenue.
"Refreshed Model 3 ramp continued successfully in Q3 with higher total production and lower cost of goods sold quarter-over-quarter. Cybertruck production increased sequentially and achieved a positive gross margin for the first time," Tesla said in its report.
Tesla re/confirm/ied its plan to produce its sub-$30,000 EV, dubbed the Model 2. Plans for new vehicles, including more affordable models, remain on track for start of production in the first half of 2025, the company said.
Tesla posted delivery of 462,890 units for the third quarter with a 6.4% YoY increase, the first rise in a year. It still expected the deliveries this year will achieve slight YoY growth despite ongoing macroeconomic headwinds. The forecast requires Tesla to deliver more than 510,000 vehicles for the current quarter, a new quarterly record that is set to be 30,000 units higher from a year ago.
Musk even predicted on an earnings call the deliveries next year could grow by 20% to 30%e, though he couched it as a "best guess." Musk told analysts Cybercab, a prototype of Tesla’s long-awaited Robotaxi, will reach volume production in 2026, with an aim to at least 2 million per year, and “maybe 4 million ultimately.”
Analysts overhauled Tesla stock price targets after earnings. Canaccord Genuity analyst George Gianarikas raised his price target by $24 to $278 per share, suggesting a 30% rise from Wednesday’s close. "Margins were good -- quite good -- much better than expected and a standout for the quarter, said Gianarikas. "The quarter was truly solid overall. Most of this strength, as we have written, comes from Tesla zigging as traditional [auto manufacturers] zagged."
Wedbush analyst Dan Ives carries an outperform rating and a $300 price target on Tesla stock. The bull said the improved margin figures were "clearly an indication that Musk & Co are continuing to focus on its profitability side while balancing its plans for the future." "With price cuts fully in the rearview mirror now, we view this as a key piece for the Street to exemplify Tesla’s ability to expand its margins as the company continues its AI/FSD transformation over the coming years," he said. "The bulls will cheer this quarter in a much needed margin boost after a choppy 2024."
JPMorgan analyst Ryan Brinkman was more cautious with an underweight rating and a price target of $135, up from $130. While the magnitude of improvement in earnings likely caught investors by surprise, the analyst sees several potentially unsustainable drivers of better earnings and cash flow performance for the third quarter, including near-record sales of 100% margin regulatory credits and atypically large working capital benefits.
