Tesla's Surprise Q1 Profit: What Wall Street's Saying

Tesla reported a surprise first quarter profit though it did miss slightly on revenue expectations in the quarter.

Tesla  (TSLA) - Get Report shares shot up Thursday following the company's first quarter report where the electric vehicle maker reported a surprise profit

The company reported first quarter earnings of $1.24 per share on revenue of $5.99 billion. Analysts were expecting a loss of 28 cents per share on revenue of $6.1 billion. Shares were rising 7.6% to $859.07 on Thursday morning.

"Tesla's Q1 results gave us insight into the ongoing rapid fundamental progress of the business despite a number of macro and seasonal headwinds," Rob Maurer, host of the Tesla Daily podcast, told TheStreet.

"This beat was driven by Shanghai Model 3 gross margins that are already approaching Fremont levels, despite being at 1/4th the production rate."

Here's what Wall Street is saying about the quarter: 

Wedbush (Neutral, Price Target Raised From $425 to $600)

To this point, clearly Musk is very frustrated by the current stay-at-home order and voiced those opinions loud and clear on the conference call especially as its main artery in Fremont remains in shutdown mode. We believe hitting the original 500k+ unit delivery threshold for 2020 is a virtual impossibility as the Street is now starting to factor this into delivery estimates for the year (~400k likely new Street bogey in our opinion).

-Daniel Ives

Barclays (Underweight, Price Target Kept at $300)

The bull narrative is that TSLA is unique amongst automakers. So with that backdrop in mind, we expected an earnings beat in a season where other OEMs are struggling. And while Tesla was a bit more guarded on 2Q and full-year than we expected (due to the lockdown at Fremont...), we still expect a fundraise shortly after the 10Q and then a bullish Battery Day later in May. 

-Brian Johnson

Morgan Stanley (Equal-Weight, Price Target Kept at $440)

The attractive parts of the long-term story remain intact. In our view, 1Q results don’t give long term fans any reason to seriously question or doubt their conviction. Most still believe that COVID-19 has a transitory impact on the company and that it should be delivering a far larger number of vehicles in 2021 than it did in 2019 (as much as 50% more).

- Adam Jonas