Tesla (NASDAQ: TSLA) shares are gaining 5% in pre-open trading Thursday after the company reported its fifth consecutive quarter of profits last night. The EV giant posted better-than-expected earnings by announcing revenue of $8.77 billion and EPS $0.76, higher than Street's $8.26 billion and $0.56 estimates. The results prompted two analyst upgrades and a host of other positive analyst sentiments.

Musk’s Tesla also said it delivered 139,300 vehicles during the third quarter, which marks a new record for the company. It is also higher than the Street estimate of 136,350.

Tesla reiterated the earlier guidance to deliver 500,000 deliveries in 2020. On production capacities, Musk said:

“I should make a point that for Berlin and Austin, we do expect to start delivering cars from those factories next year but because of the exponential nature of the spool up of manufacturing plants especially one with new technology, we’ll start off very slow at first and then become very large.”

Daniel Ives, an analyst at Wedbush, said that the profitability picture of TSLA remains a focus for investors.

“To this point GAAP gross margin was strong at 23.5% again beating the Street's expectation of 20.6% (with impressive automotive gross margin of 27.7% vs. the expectation of 24.1%); the all important Automotive GM ex-credits was 23.7% over 200 bps ahead of expectations driving Adj. EBITDA of $1.81 billion/margin of 20.6% compared to the year ago number of $1.08 billion/margin of 17.2% which speaks to a business model that continues to have significantly lower costs and more production efficiency even in the face of challenging circumstances globally given COVID-19,” Ives wrote in a note sent to clients after Tesla reported its 3Q numbers. He maintained a “Neutral” rating on TSLA with a price target set at $500.00 per share.

Baird analyst Ben Kallo used the results to upgrade shares from Neutral to Outperform with a price target of $488. He said while they were too early in their January downgrade, they think it is not too late for them to "join the party." Kallo said the company's competitive moat over peers is substantial and growing, enabled by rapid capital deployment. They think it is unlikely traditional OEMs will be able to effectively compete over time. He views Tesla as a “must own” stock for investors looking for exposure to ESG, sustainability, and disruptive technology trends.

Likewise, JMP Securities analyst Joseph Osha upgraded Tesla from Market Perform to Market Outperform with a price target of $516. Osha said the outlook for margins and for cash flow generation over the next several years appears to be higher than they thought. This impacted their financial model, but also the level of risk they assign to the 2025 outcome and the multiple they apply. "We slightly bump our valuation multiple – to 6x EV/Revenue (prior 5x) and 30x EV/EBITDA (unchanged) on 2025 projections – and apply an 8% discount rate to our new numbers, and we end up at a $516 PT. In our view, this is enough of a premium to merit returning to a Market Outperform rating," he commented.