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Why Tesla Stock Isn't Higher After Earnings: Jim Cramer Explains

Jim Cramer gives his take on why what Tesla's gigafactory means for Austin, Texas and the reason Tesla stock hasn't moved more on a landmark earnings beat.

Elon Musk once again showed that he means business when Tesla reported earnings after the bell Wednesday.

While Musk stressed during the earnings call that being too profitable isn’t the priority, the electric carmaker defied Wall Street expectations, reporting adjusted earnings per share of $2.18 compared an anticipated 3 cents per share. Total sales of $6.04 billion also exceeded FactSet estimates of $5.15 billion.

The company reported a positive free cash flow of $418 million, compared to a negative $895 million in the prior quarter. Despite production disruptions amid the coronavirus pandemic, Tesla said it still has the capacity to exceed 500,000 vehicle deliveries in 2020.

Tesla also confirmed plans to build its next Gigafactory outside of Austin, Texas. Musk said that construction is already underway.

Musk said he’s never been more optimistic in the future of Tesla, as the quarter marked the fourth straight quarter of profitability. Though S&P 500 members still hold discretion, the company has met the base requirements for entry into the index.

Tesla Maven Rob Maurer wrote that the company is poised for rapid expansion. Going forward, “Q3 and Q4 may be the first opportunities for Tesla to demonstrate exactly how profitable it can be,” Maurer wrote.

TheStreet’s Jim Cramer had been an avid Tesla bull heading into earnings. What does he think now? 

Despite the monumental beat, Tesla stock is only around flat in early trading Thursday, and Cramer said there's a simply reason for that. Find out in the video above. 

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