Tesla stock surge after trading as revenue beats estimate

Tesla Inc. late Wednesday reported a surprise second-quarter GAAP and adjusted profit, sending the stock more than 3% higher in the extended session

Tesla TSLA, +1.52% said it earned $104 million, or 50 cents a share, in the quarter, contrasting with a loss of $408 million, or $2.31 a share, in the year-ago quarter.

Adjusted for one-time items, Tesla earned $2.18 a share, swinging from an adjusted loss of $1.12 a year ago.

Sales fell 5% to $6.04 billion from $6.4 billion a year ago.

Analysts polled by FactSet expected an adjusted loss of 2 cents a share on sales of $5.15 billion.

Before Wednesday, the Silicon Valley car maker had reported three consecutive quarters of GAAP and adjusted profit. That fourth consecutive profit sets it on course to join the S&P 500 index within a few months.

Tesla earlier this month reported second-quarter sales that crushed Wall Street expectations, even as its sole U.S. car-making factory was shuttered for most of the quarter under local shelter-in-place orders.

The sales surge was one of the recent catalysts for the stock rally, which has pushed Tesla’s market valuation around $300 billion, about $95 billion ahead of Japan’s Toyota Motor Corp. TM, -0.00% and the No. 1 car maker in the world by market value. The shares ended at a record $1,643 on Monday, and hit an intraday record of $1.794.99 on July 13.

In April, Tesla also surprised investors by posting a first-quarter profit. Chief Executive Elon Musk kept the surprises going on a post-results call with analysts, veering off script to condemn the closures put in place to curb the spread of the virus and likening them to fascism.

Musk also ignited Twitter and legal spats that prompted even President Donald Trump to chime in on the factory closure.

Tesla’s Fremont, Calif., factory reopened in May in defiance of local shutdown orders. The standoff was eventually resolved, with Tesla reopening the plant after filing a health and safety plan with local authorities.

Earlier Wednesday, analysts at B. of A. Securities kept their cautious stance on Tesla, saying that the stock was overheated and urging investors to “remain cautious despite hype and momentum.”

The analysts increased their price target on the shares to $800, from $500, but kept their equivalent of a sell rating. The mean price target on Tesla from 31 analysts polled by FactSet is $912, with the top of the range being above $1,500.

Tesla shares have gained nearly 300% this year, comparing with gains around 1% for the S&P 500 index SPX, +0.57% and contrasting with a loss around 6% for the Dow Jones Industrial Average DJIA, +0.61%.