Tesla Deliveries Crushed Expectations. That’s Good News for the Stock.

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Another quarter, another record.

Tesla is growing rapidly despite a global automotive semiconductor shortage that is roiling car production across the globe.

The electric vehicle pioneer on Saturday reported a record quarter with deliveries up more than 70% from a year ago. Tesla stock closed up 0.8% Monday, at $781.53, on a rough day for markets. The Nasdaq Composite fell 2.1%. The S&P 500 and

Dow Jones Industrial Average
dropped 1.3% and 0.9%, respectively.

Tesla (ticker: TSLA) delivered 241,300 vehicles in the third quarter of 2021, up from about 201,000 delivered in the second quarter of the year, and up from about 140,000 delivered in the third quarter of 2020. Wall Street was looking for roughly 225,0000 to 230,000 vehicle deliveries.

Tesla produced almost 238,000 vehicles in the third quarter. Production and deliveries—to customers—are typical close to one another.

Year to date, Tesla has delivered more than 627,000 vehicles, up almost 100% compared with 2020. And the company did it despite the semiconductor shortage that is plaguing car companies globally. “[While most major OEMs have cut production in 3Q21, Tesla has managed to weather the chip crisis fairly well overcoming snarled supply chain issues,” writes Cowen’s Jeffrey Osborne.

The results were good enough for the stock to get a boost Monday. The bigger reaction to strong deliveries typically comes in the weeks following the release of the figures.

Tesla stock has outperformed the

S&P 500
six out of the past eight times in the span between reporting deliveries and reporting quarterly earnings. Quarterly earnings come about three or four weeks after delivery results.

Quarterly deliveries have set new records seven of the past eight quarters. That’s unsurprising for a growth stock such as Tesla. But record deliveries don’t always mean Tesla stock jumps immediately following any quarterly release. Expectations, of course, matter more than the actual number. And expectations for third quarter deliveries have been rising.

Expectations for third-quarter deliveries have migrated up from roughly 220,000 to 225,000 to 225,000 to 230,000 over the past couple of weeks. In fact, rising expectations are a big reason Tesla stock has outperformed recently.

Tesla stock has looked remarkably stable in the face of recent market volatility. Shares are up 0.1% over the past week. The

Nasdaq Composite
dropped 3.2% over the same span. The S&P 500 is 2.2%. What’s more, Tesla stock rose about 5% in September. The Nasdaq dropped 5%. Stock in Chinese EV maker

NIO (NIO) dropped 9%.

Investors get inured to good news, too. Tesla stock rose 4.4% after first-quarter 2021 deliveries were reported. Shares rose only 0.1% after second-quarter deliveries were reported. The second quarter figure, another record, was the first time Tesla cracked 200,000 vehicle deliveries.

Overall, Tesla appears to have passed the third quarter delivery test. Wedbush analyst Dan Ives—a Tesla bull who rates shares Buy with a $1,000 price target—called the numbers “massive…despite chip shortage,” in a Saturday report. More cars delivered than what analysts expected means that analysts will likely bump up their earnings estimates for the third quarter. Rising earnings estimates are good for stocks—and they might be why Tesla shares are typically strong following earnings results.

But good news can also be just good news.

Before earnings, Tesla hosts its annual meeting on October 7. At that event, investors will want to hear about production increases at the company’s two new facilities in Texas and Germany.

Write to Al Root at [email protected]