Tesla shares pop 10% after blowout earnings suggest it may be the 'sustainable self-funded entity' promised by CEO Elon Musk

  • Tesla shares skyrocket after the company delivered better-than-expected results.
  • The company is showing signs it may be on its way to becoming a sustainable self-funding entity.

Tesla shares jumped more than 10 percent in early trading Thursday, a day after the electric car maker delivered third-quarter earnings that blew past expectations, showing signs that it is on its way to becoming the sustainably self-funded company promised by CEO Elon Musk.

Musk had previously said he expected Tesla to be both profitable and cash-flow positive in the third quarter. Before releasing its results late Wednesday, Tesla had reported just two profitable quarters since it went public in 2010.

"TSLA may have crossed the line to become self-funding, which would be another clear positive," said RBC Capital analyst Joseph Spak in a note published Thursday morning. "Expect positive momentum."

Positive results are probably sustainable in the near term, but there remain some questions for the longer term, he added.

Morgan Stanley analyst Adam Jonas said it was Tesla's "strongest quarter in history by virtually every metric."

Nomura analyst Romit Shah said he found a number of reasons to think profitability and positive cash flow are both sustainable over the long term.

"Tesla cited its structurally superior cash conversion cycle (relative to industry peers), continued Model 3 cost improvements, and yet-to-be maximized operating efficiencies as the primary drivers," Shah said. The earnings results "may mark the quarter in which Tesla became a sustainably self-funded entity."

Here's what every major analyst says about Tesla's third-quarter profit.