Tesla Gains 11% As Strong Earnings Outweigh Musk’s ‘Distractions’

Topline

Tesla shares skyrocketed Thursday after the company reported its best-ever quarterly sales and profit in a report that largely shattered market expectations, as the stock bounces back from multiyear lows as investor sentiment soured regarding the company’s limitless growth prospects and distractions from its billionaire CEO Elon Musk.

A smiling Elon Musk leaving a federal courtroom earlier this week.

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Key Facts

Tesla rose nearly 10% to about $160, its highest price since December 16, adding about $50 billion in market capitalization to bring its value to $506 billion.

Shares are now up 47% over the last month.

Tesla is the second-best performer of any stock listed on the S&P 500 over the last month, according to FactSet data, trailing only Warner Bros. Discovery.

Tesla is the best-performing publicly traded company with a market cap over $20 billion Thursday, according to Yahoo Finance data.

Contra

Shares of the automaker are still down over 60% from its November 2021 all-time high of nearly $410, when its market cap peaked at about $1.2 trillion.

Key Background

Tesla recorded $24.32 billion in total revenue and $1.19 earnings per share during the fourth quarter of 2022, each surpassing analysts’ consensus estimates, though the company’s gross profit margins sunk to its lowest level since 2021 and operating costs surged. Still, Musk declared 2022 the “best year ever on every level” for Tesla in a Wednesday earnings call, also predicting Tesla could sell two million vehicles in 2023, surpassing the company’s guidance.

Tangent

Musk showed no signs of slowing down his involvement at Twitter during the call, calling the social media company he bought for $44 billion last year and leads as CEO “an incredibly powerful tool for driving demand” at Tesla – despite the latter’s stock tanking over 50% as investors bemoaned Musk’s “antics” regarding Twitter. In a Wednesday note to clients, Bank of America analysts led by John Murphy called Tesla’s “management distractions” with Twitter present a continued drag on Tesla shares.

Forbes Valuation

Musk is the second-richest person on earth with a net worth of $169.3 billion, according to our most recent estimates, adding $9.3 billion to his pile of wealth Thursday thanks to Tesla’s surge.