Tesla might be about to go on its most profitable bull run ever after the earnings call was released today I'll be breaking down everything you need to know welcome to trade daily where we break down all the best stock market news like And subscribe to keep up to date with the stock market and I really hope you enjoy this video electric vehicle producer Tesla has been one of the most analyzed stocks on Wall Street since his public debut over a decade ago while the cars have a Sleek aesthetic and the underlying technology


powering the vehicles seems like something out of the future it's really the company's charismatic albeit polarizing CEOs Elon Musk has been at the nucleus of a lot of Tesla's attention with that said here's a closer look at Tesla's third quarter 2022 earnings report the current valuation of the company and what long-term investors should be focusing on moving forward let's do a little bit of Economics 101 supply and demand and basic economic theory prices tend to rise when consumer


demand is rising and the supply of goods is falling by contrast when there is an excess supply of goods consumer demand tends to fall and so do prices for Tesla some investors may have been initially wary of the company's demand given its slight Miss in vehicles delivered during the third quarter however daunting as this may be one of the most important items to take away from musk on the earnings calls the following statement I can't emphasize enough we have excellent demand for Q4 and we expect to sell


every car that we make for as far in the future as we can see musk is showcasing to investors that demand the company's Vehicles is not the challenge rather Tesla is facing far more complex challenges such as supply chain disruption inflation Global energy crises and Rising interest rates so where Q3 results really that bad for the quarter that ended step 30 Tesla reported dollar 18.7 billion of revenue from its Automotive unit a staggering 55 year-over-year increase however while the Top Line grew at a healthy clip it's


important to note that the gross margin from the automotive unit declined by roughly 2.5 percent year-over-year Tesla CFO Zachary kirkhorn addressed the margin deterioration on the earnings call stating removing regulatory credits and Austin and Berlin our operating margins would have been our strongest yet and auto gross margin would have been nearly 30 percent note that while small and growing each car we build in Austin and Berlin is contributing positively to profitability what kirkhorn is trying to convey here is


that in order to meet its demand Tesla must invest heavily upfront in its key to factories in Austin and Berlin yet even with this ratcheted up investment Tesla is still net positive on each car produces therefore circling back to most comments about demand Tesla is in a position to expand and its margins dramatically once the company is able to fulfill production capacities another important metric to focus on in Tesla's Q3 results is profitability although margins to be hit the company's


operating expenses were dollar 1.7 billion which was only a nominal increase of two percent year-over-year because costs were relatively flat Tesla's Revenue growth far exceeded that of internal Investments for this reason the company was able to generate dollar 3.3 billion in net income up 103 percent year over year this is very impressive given the amount of challenges Tesla has needed to work around this year by generating strong increasing profits consistently Tesla is only strengthening


its balance sheet and position in the electronic vehicle EV Marketplace should Tesla investors worry about a recession there is no sugar coating the fact that Tesla is staring down a lot of complicated hurdles the cost of raw materials for its batteries is rising foreign exchange rates are fluctuating dramatically the global chip shortage can impact the company's vehicle production and economists around the world are debating about the likelihood of a worldwide recession in the intermediate future


when asked on the earnings call about the possibility or prolonged recession must did something very interesting about the Ed Market he essentially said that while the market might not be entirely immune to a recession is resilient to one because people are embracing the shift to electric cars over traditional gasoline operated choices even if recession resilient is a questionable classification must assessment in the earnings call essentially reiterates that demand for Tesla's Vehicles is currently and will


continue to be robust so even in the face of a recession musk is bullish that consumers will still be purchasing the company's vehicles in high volumes however as promising as this may sound if you're looking to invest in Tesla stock it's important to remember that Tesla completed a 3-4 one stock split over the summer accordingly investors should not be fooled by the company's seemingly cheap stock price but the case for Tesla stock does get stronger even with that consideration in mind


following the company's earnings long time Tesla Bull and CEO of Arc Investment Management Kathy Wood bought another six to six thousand shares for her fund the ark Innovation ETF which equated to a little more than dollar 13 million dollars additionally as of the time of this writing Tesla is trailing 12-month price to sales multiple is 10.6 roughly half of what it was during this time last year for investors of the long-term mindset now could be a lucrative time to acquire more Tesla shares the non of approval


from a longtime supporter of Tesla in Wood combined with a reasonable valuation and the commitment to consistent growth from must makes Tesla a compelling stock perhaps must sum it up best when he said knock on wood it looks like we'll have an epic end of the year so Q4 is looking extremely good as a Tesla investor this has me more confident and encouraged than ever but this isn't the only news and reason for Tesla stock surging today I'll explain exactly what happened in a second and just before we continue we're giving


away a 50 Amazon gift card every single day you just need to subscribe to the channel like this video and get the Bell on also comment at love trade daily to lock in your entry winners will be contacted privately good luck now let's not waste another second and get right back into the video Ellen musk reportedly met with a Mexican Governor regarding a potential new investment south of the Texas border Tesla stock is moving higher for the second straight day today after jumping another 3.7 percent in early trading


Tesla shares were up 1.6 percent at 223 pmn bringing its two-day gain to about seven percent the moves higher came after one analyst still sees more than 50 upside for Tesla stock even in the face of economic headwinds as well as a report that the EV leader might have its sights set on the next location for another manufacturing plan following Tesla's the third quarter earnings report last week Morgan Stanley's Adam Jonas lowered his price Target on the stock to Dollar 330 per share from


Dollar 350. though Jonas said he wanted to make room for unexpected headwinds in the current economic environment the new price Target is still more than 50 percent higher than where Tesla stocks started this week other news came from Reuters reporting that Tesla's CEO Ellen musk may be planning on a new investment in Mexico most reportedly met with the governor of the northern Mexican state of Nouveau Leon which borders Texas the medium also included other local officials and the U.S ambassador to Mexico Ken Salazar


according to Reuters several U.S automakers have operations and suppliers in Mexico and it remains unclear if must is eyeing the area for a new production facility or some other need musk has said his company would eventually likely need about 12 manufacturing plants to produce the volume he eventually strives for Tesla is currently ramping up its third and fourth facilities in Germany and Austin Texas investors want to see that growth from the company regardless of where musk identifies the next site


or sites the report that he may be making progress on a new investment seems to have investors buying back into the stock this week after it has declined more than 35 percent year-to-date and with that we've come to the end of the video I'd like to give a huge shout out to anyone who's made it this far I hope you enjoyed the video I'd also like to make it clear that this is a news and entertainment video not investment advice you should always do your your own research and speak to a


financial advisor before making any Investments thank you all so much for your support don't forget to like And subscribe for the chance to win up to twenty thousand dollars in Amazon gift cards and we'll see you in the next video if you want more crazy trade news how about this video we did