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Analysts Weigh in on Tesla's Q1 21 Earnings Results

Analysts comment on Tesla's record $438 million Q1 earnings.

This story originally appeared on ValueWalk

Tesla Inc (NASDAQ:TSLA) released its first-quarter earnings report on Monday after closing bell, and analysts have quite a bit to say about those mixed results. The automaker posted record net income of $438 million, and its revenue skyrocketed 74%.

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Tesla's earnings by the numbers

Tesla posted earnings of 93 cents per share on $10.39 billion in sales, coming out ahead of expectations. Wall Street had been looking for 79 cents per share in revenue and $10.29 billion in revenue. Net profit amounted to $438 million on a GAAP basis, and Tesla sold $518 million worth of regulatory credits during the first quarter. The automaker also realized a positive impact of $101 million from selling 10% of its bitcoin during the quarter.

Tesla didn't produce any Model Ss or Model Xs during the quarter, although it did deliver about 2,000 of them produced in the previous quarter. On the earnings call, CEO Elon Musk said deliveries of the updated version of the Model S would begin in May, while deliveries of the refreshed Model X will start in the third quarter.

In January, he had said that the Model S Plaid was already in production for February deliveries, but on Monday, he admitted that they faced more challenges than expected with the production. The automaker plans to produce 2,000 Model S and Model X vehicles every week starting later this year. Tesla looks for over 50% growth in vehicle deliveries this year, which implies about 750,000 deliveries.

Analysts react to Tesla's earnings

Analysts are split on the automaker's earnings report, with some pointing to problems like the regulatory credits. For example, according to MarketWatch, Danni Hewson of AJ Bell noted that $518 million was cash generated from sales of regulatory credits rather than sales of cars.

He added that the amount nearly doubled from the same quarter a year ago and that Tesla shouldn't rely on regulatory credit sales to get by. Additionally, another $110 million in profits came from selling bitcoin, so the core business is still losing money.

Wedbush analyst Daniel Ives remained firmly in the bull camp on Tesla, although he noted that the automaker did not meet bullish expectations of $10.48 billion in revenue. He pointed out that the automotive gross margin was strong at 22%, excluding regulatory credits, an improvement from 20% in the same quarter last year.

Tesla is part of the Entrepreneur Index, which tracks 60 of the largest publicly traded companies managed by their founders or their founders' families.