Is it time to buy Tesla stock (TSLA)?

Tesla TSLA saw its price rise last month while the rest of the market was down following continued sales of technology, driven by companies like Apple AAPL, Amazon AMZN and other shares of FAANG. Let's see why the actions of Tesla seem to be a good buy despite the uncertainty of the current market, while the energy of electric cars seems ready to accelerate production and profitability.

Overview

Tesla impressed investors with its quarterly revenues that jumped 128 percent from $ 2.98 billion in the same quarter of last year to $ 6.82 billion. This ruined our consensus estimate of Zacks and also showed a 70% growth compared to the second quarter.

At the bottom of the income statement, Tesla went from a loss of $ 2.92 per share in the same quarter of last year to an adjusted earnings of $ 2.90 per share due Improved gross margins in the automotive sector and reduced operating expenses.

In addition, Tesla's Model 3, with weekly production of 4,300 units, was the top-selling car in the United States in terms of third quarter sales, ahead of the Toyota TM, Honda HMC and Ford F brands. The company Elon Musk delivered a total of 56,065 models 3 at a starting price of $ 49,000. Looking ahead, Tesla remains committed to reducing the cost of Model 3 to its $ 35,000 mass market goal.

Price movement

TSLA shares have jumped about 30% in the last month. Meanwhile, the S & P 500 plunged 4%. The Tesla stock is up about 9% since the beginning of the year, compared to the marginal decline in the index. However, it should be noted that this includes major turbulence.

Shares of TSLA closed their normal trading Wednesday down 2.7% to $ 338.19 per share. This represents a drop of about 12% from its 52-week high of $ 387.46 per share.

Perspective

In the future, Musk plans to remain active in the electric car manufacturer's production campaign and has indicated that he would walk on the Model 3 channel on November 27th and 28th. Musk wrote in an email last week that all assembly areas must be able to support manufacturing. 1000 cars a day. "If you can not find a way to get there, let me know as soon as possible so that I can help solve this problem," Musk wrote. "This is extremely important for our prosperity."

Clearly, production rates are paramount and will be in the foreseeable future. On top of that, Tesla still has looming debt problems. But the firm seems to eventually be able to raise the necessary funds by selling more shares.

Investors would be harmed in the short term. However, this will probably prove to be absolutely necessary for Tesla to achieve its long-term goals.

In the short term, our estimate of the current Zacks consensus calls for Tesla's fourth quarter revenues to skyrocket to 113 per cent from $ 113 billion. Meanwhile, Tesla's revenue for the full year is expected to increase 81% to $ 21.30 billion.

Earnings trends

Tesla is expected to post an adjusted profit of $ 2.13 per share in the fourth quarter, which would be a 170% increase over the loss of $ 3.04 per share recorded in the same quarter of the previous year. Tesla should still record an annual loss of $ 1.25 per share. However, adjusted earnings of $ 4.74 per share are expected to be achieved in fiscal year 2019.

In addition, the graphs below show how better Tesla's earnings prospects are after its strong third quarter performance and improved outlook.

Bottom line

Tesla's revenue review activity over the past 30 days has earned him Rank 1 of Zacks (Strong Purchase). TSLA displays an "A" for growth in our style system. Tesla also plans to market the Model 3 in Europe early next year, where he said the mid-size luxury sedan market is more than double the size of the United States.

And let 's not forget that the electric vehicle revolution has barely begun.

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