TSLA Stock Earnings: 3 Key Takeaways From Tesla’s Q1

It has been a tense week for investors, but Tesla (NASDAQ:TSLA) stock fans can finally breathe a sigh of relief because its first-quarter earnings are in. The numbers are not perfect, but they speak favorably about what matters most. TSLA stock is reacting well, up 4.7% in after-hours trading.

Tesla had already delighted investors by reporting a sales record for the first quarter. And while some feared that it was the only good news Tesla fans would see this quarter, today’s earnings call should serve as reassurance.

Let’s take a closer look at the Tesla earnings report and what it means for investors.

Takeaway No. 1: TSLA Stock Can Rally on Revenue Growth

The most important takeaway from the report is that Tesla managed to beat analyst expectations on both the top and bottom lines this quarter. It reported adjusted earnings per share at $3.22 versus the expected $2.26. Revenue reached $18.76 billion, better than the $17.8 billion Wall Street had projected. Its reported automotive revenue of $16.86 billion represents a gain of roughly 87% from one year ago. Automotive gross margins increased by almost 33%, with Tesla’s reported gross profit reaching $5.54 billion.

As CNBC reported, “Revenue growth was driven in part by an increase in the number of cars Tesla delivered, and an increase in average sales prices, the company said in its shareholder deck.”

Given the constraints Tesla has faced over the past quarter, these numbers are encouraging. With factories in Shanghai temporarily closed, some experts speculated that Tesla’s production would suffer. This earnings report proves one thing: Even in daunting circumstances, Tesla is able to rise above.

Takeaway No. 2: Tesla Faced Declines in Energy Segment

The news wasn’t so good for Tesla’s energy holdings.

The company’s solar deployments have decreased by almost 50%, coming in at 48 megawatts (MW). Its energy storage deployment of 846 megawatt hours represented a 90% increase year over year but fell sequentially.

Tesla’s energy update was certainly less than ideal. However, investors should take some comfort in the fact that these declines were not from the automotive segment, from which Tesla generates most of its revenue.

Takeaway No. 3: Musk Drives Speculation

Elon Musk hasn’t been present for every Tesla earnings call. However, he confirmed on social media earlier on Wednesday that he would speak in the after-hours discussion. Investors have been particularly excited because they are hoping for an update on his bid to acquire Twitter (NYSE:TWTR). His recent tweets have fueled plenty of speculation that big news is coming soon regarding a tender offer. His tactic of keeping investors guessing has so far worked well.

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Originally published on InvestorPlace.com

On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

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