Here's Tesla's bull and bear case following its earnings stock pop

All right, let's turn to Tesla. The shares are surging, of course, after the company, after the bell yesterday, reported better than expected profit. Let's get the take from two analysts who are on different sides of this. Colin Lang, a Wells Fargo analyst, joins us. He has an underweight rating, did raise his price target to 125 from 120. Tom Morine also joins us frequently. RBC Capital Markets analyst has an outperform. He raised his target as well, and as you might imagine, it's far higher at 249. Guys, Colin, let me start with you. Is it getting a little harder to defend a negative view given that quarter? I mean, the quarter alone was a good quarter. I'll give them credit for that. OPEX Energy Gen was stronger. But look, it was a 12-cent beat versus consensus. Seven came from full self-driving release, which is really cruel for prior deliveries, prior services they gave on software. So I really think that should be one time in nature. And most of the rest was actually stronger EV credits. I'll give them credit. The cogs were very good. But for my concern, it's been the price cuts and volume. And year-to-date volume's down 2 percent. And pricing was down 3 percent in the quarter. It's down 5 percent versus Q4. So the core auto business, I think, still is in struggle. But they did a good job on cost. I'll give them credit. And you're not a believer in Musk's predictions for next year in terms of the increase in sales? I am not. I think if you the lower-priced model is probably going to cannibalize some of Model 3 and Y. I also realize we're seeing demand there, as I just kind of highlighted. Demand is sinking on those models, even with the price cuts. So I think demand is going to definitely not fall short of the 20 to 30 percent. I actually think there's a risk volumes could be down next year. So, yeah, I don't believe in it. I also think we have to focus on margins. So a lower-priced model, it's going to be hard to make that profitably. And it's also going to be hard to slot that in because you're already getting something like $3,000 to $5,000 in financing promos on vehicles like the Model 3. It doesn't leave a lot of cushion to lower the price of the Model 2.5, or whatever people are calling on this lower-priced version. Tom, I would assume you have a different view. And obviously, an important point here is that margins did come in well above what many had been anticipating, including, I believe, yourself. Yeah, I actually agree with a lot of what Colin said, believe it or not. The 17.1 percent gross margin X credit was a strong beat. I do think if you take out those FSD deferred revenue piece, you still come out with a very strong gross profit margin X credit. And that comes with all those price cutting. So exactly that is why we actually think that the automotive performance was actually pretty healthy. They were able to do it with substantial price cutting. Look at the other OEMs, the legacy OEMs, what's been happening to their margins with price cutting. And I actually think the setup for next year on growth, I agree with Colin. It's not going to be 20, 30 percent that maybe Elon is saying, but we have a 13 percent growth rate, which is actually where consensus is. There is growth rate. And if they can do it with the margin strength that they have, now folks can stop thinking about the automotive piece and margins and start looking at what really should drive the stock, right, which is non-automotive things, energy storage, autonomy, potentially optimists. But now I think it's more of the distraction that was this automotive piece. Now folks can turn their attention to things that actually drive the stock price and the market capitalization to where it is. Well, Colin, is there election risk around Tesla stock? Is that part of the thesis at all? Well, one, I think, you know, just on the last points, I mean, I think the stocks are forward looking. And so can the level of cost performance continue? They cut price about $1,500. Can they really take another $1,500 sequentially? I don't think so. So I think as we go into Q4, not only do you have the FSD coming down, but you're probably going to still have some of that pricing pressure continue. So I think forward looking, I think we're going to still see the auto business under pressure. I also would take a different view on the RoboTaxi view. We just had that RoboTaxi event. There's still challenges. They really aren't addressing some of the issues there. Can they actually do this with vision only? Will the economics work? Will they get regulatory approval? Realize that RoboTaxi event was done in a Hollywood studio because the vehicles aren't yet approved to actually be tested on public roads yet. So there's a lot of challenges ahead. So I would actually take the counter on the RoboTaxi side. I actually think, you know, you look at companies like Waymo, they're actually doing a lot better.