Tesla stock has been doing very well over the past couple of weeks after reporting third-quarter earnings. Let’s analyze if the rally is sustainable or not.

Deliveries Soar

It might have been a bit of an up and down year for electric vehicle manufacturing giant Tesla Inc (NASDAQ:TSLA); however, the company’s strong performance in the 3rd quarter has raised optimism among market watchers again. It was an almost perfect quarter for the company, as its deliveries went up both sequentially and year-on-year. Its margins improved considerably, while sales picked up in Europe and China as well.

After the publication of the results, the stock soared by as much as 30% but soon cooled off as many investors booked their profits. Some analysts now believe that in the long-term, TSLA stock could be worth as much as $300.

The post-earnings surge was certainly promising, and it will be prudent on the part of investors to let the optimism cool down a bit before considering Tesla stock. However, experts believe that all fundamentals are now in place so that a long-term hold on TSLA stock could eventually see it touch $300 a share or beyond. One of the most important takeaways from the Q3 2019 results is the fact that the company made a substantial profit of as much as $1.91 a share, and that blew analysts’ estimates out of the water.

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In addition to that, Tesla has managed to grow its deliveries consistently and is now on track to hit its full-year projection. On the other hand, gross margins improved by as much as 4.39% from the previous quarter, and that is another factor that is going to have a long-term effect on the company’s well being.

Last but not least, Tesla has also succeeded in reducing its costs, and in Q3 2019, it went down by 1.3% year-on-year. However, it is almost a given that expenses will rise again when the company starts working on a new model. That being said, things currently look bright, and the bullish stance of some analysts is perhaps understandable for TSLA stock.

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