Why Tesla Stock Is Up By 10% Today

Tesla Stock Rallies After Company Releases Q4 Production Report

Shares of Tesla gained strong upside momentum after the company released its vehicle production & deliveries report for the fourth quarter.

Tesla stated that it “achieved production of more than 305,000 vehicles and deliveries of over 308,000 vehicles”. In the full year 2021, Tesla produced 930,422 vehicles and delivered 936,172 vehicles.

Tesla’s deliveries exceeded analyst estimates, which was bullish for the stock. Importantly, Tesla managed to show strong results at a time when the auto industry was suffering from supply chain problems.

Not surprisingly, traders rushed to buy Tesla stock after the release of the report and pushed it above the $1,150 level.

What’s Next For Tesla Stock?

Analyst estimates for Tesla earnings keep moving higher. Analysts expect that Tesla will report earnings of $8.4 per share in 2022, so the stock is trading at 138 forward P/E. The stock looks extremely overbought by traditional metrics, but it managed to stay at similar valuation levels for many months.

As analyst estimates rise at a robust pace, traders have no reason to worry about hefty valuation levels. In addition, Elon Musk has already sold the planned amount of Tesla stock, so this major downside catalyst has disappeared.

As a result of recent positive developments, Tesla stock managed to rally from the $900 level to the $1,150 level in just two weeks. At this point, the stock is trading not far from all-time high levels near $1,245.

Interestingly, RSI for Tesla stock remains in the moderate territory, so there is enough room to gain additional upside momentum in the upcoming trading sessions.

As traders remain optimistic after the strong production reports and do not question whether current valuations is justified, the stock will surely attract more speculative players in case it gets to the test of all-time high levels.

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