Tesla shares surged 6 percent on Thursday after reporting earnings that beat Wall Street's expectations on Wednesday. Here's what four experts told CNBC about the move.
Nancy Tengler, chief investment officer at Heartland Financial, said: "This a great beat, this is big, I think on revenue, on production. I'd like to see what the Model 3 looks like in terms of production, but it's hard to justify the valuation when you compare it to Ford or GM. I get the technology, but I think at some point it comes down to valuation." Tengler said, however, that she sold the stock at the end of 2017, and has been "pretty happy with that."
Romit Shah, analyst at Nomura Instinet, said he's encouraged by the electric automaker's earnings results. "I think the numbers are solid. If you think about the bear case just over the last year, Tesla can't make the Model 3 ... there's not enough for the Model 3 … they can't make money making the Model 3, and I don't know what people who are bearish on this stock have left. The cash flow numbers and the balance sheet look really solid." Though Shah has been a long-term bull on the stock, last month he downgraded Tesla shares, calling the security "no longer investable" due to CEO Elon Musk's leadership.
"I'd like to hear about plans for making the Model 3 profitably, at lower price points, preferably $45,000 or below. And I'd like to hear about plans for continuing to address the liquidity situation. I think that's pretty important, in particular if they do decide to try to build a plant in China next year. That could take some money as well. But I do think the numbers today are a validation of our longer-term thesis, which is that the company can continue to grow at a rate multiples of the industry, which is by the way why we are buyers of the stock despite it being more expensive than any other automotive company," said Joe Osha, analyst at JMP Securities, who gave the stock an outperform rating on Wednesday before the earnings report.
"It's such a transformation. I liken back to ... the year 1900. New York was basically entirely driven by horse and carriage. In 1907 it was almost entirely driven by automotive. When I think about that kind of transformation and the potential that Tesla has not only around autonomy ... [Wednesday] on the conference call they were talking about competing with Uber and Lyft with a ride-sharing model. When I think about what they can do around electric and autonomy, I look the other way when it comes to valuation," said Gene Munster of Loup Ventures.
Bottom line: Tesla's quarterly earnings report was impressive, though investment experts remain divided on whether the stock is out of the woods.