Shares of Tesla (NASDAQ:TSLA) dropped slightly after the EV maker reported fourth-quarter numbers which beat on the top line, but missed on the bottom line. As of this writing, TSLA stock is down about 3% on the day. Zooming out, the Tesla earnings miss is much ado about nothing.

And today’s earnings dip in Tesla’s stock is nothing but a buying opportunity. Consider that Tesla’s delivery volumes, revenues, margins and profits are all soaring. And over the past few months, TSLA stock is soaring. Everything is soaring.

And the bull case doesn’t end just because of one bottom-line miss. Everything will keep soaring at Tesla for the foreseeable future, because the company is launching new products and services, expanding production capacity and geographic reach, benefitting from economies of scale and pushing into new industries like solar and battery storage.

In other words, Tesla is killing it today, and will continue to kill it. This company will one day be the largest end-to-end energy company in the world.

Sure, TSLA stock is challenged by valuation friction today. But such valuation friction is short-term in nature. It will pass — and long term, TSLA stock will only keep pushing higher.

Here’s a deeper look.

TSLA Stock: Strong Quarterly Numbers

Tesla did miss earnings estimates in Q4. But, outside of that, the underlying numbers and trends in the quarter were excellent.

Deliveries rose 61% year-over-year in the quarter. Production volume rose 71%. Revenues jumped 46%. Automotive gross margins expanded 157 basis points. Operating margins expanded 49 basis points. EBITDA dollars soared 57%. Adjusted profits nearly doubled year-over-year.

There is nothing wrong with those numbers.

Sure, Tesla missed EPS estimates by 25 cents … so what?

Deliveries, production, revenues, margins and profits make the case for TSLA. So long as that remains true, the outlook for TSLA stock will remain highly favorable.

Great Outlook for Tesla

With Tesla firing on all cylinders, the outlook for Tesla’s stock remains strong.

The company is launching new products. Semi deliveries are expected to start in 2021. Mass production of the Cybertruck is expected in 2022. The company is also building gigafactories in Berlin and Texas, launching new Model S and X versions in February, and planning to mass-produce the new 4680 battery soon. All of these new products and expanded production capability should keep automotive revenues on a solid upward trajectory.

Meanwhile, Tesla plans to start licensing its software to other auto makers, and wants to monetize its widespread Supercharger network of EV chargers. Further, it plans to launch Full Self-Driving subscriptions for drivers soon, and will put a lot of attention and resources into expanding its solar business in 2021-2022.

Those initiatives will only add more firepower to the already supercharged revenue growth trajectory at Tesla.

Concurrently, thanks to this sustained robust revenue growth, Tesla will continue to benefit significantly from economies of scale, and profit margins will continue to move higher. Of course, this combination of big revenue growth and steady margin expansion lays the groundwork for enormous profit growth.

As go profits, so go stocks.

TSLA stock will be no exception to this trend.

Tesla Stock Valuation Challenges Will Pass

As bears will correctly point out, TSLA stock is richly valued today. There’s no hiding that reality. This is an $850 stock that is set to do less than $5 in earnings per share in 2021.

Tesla stock is richly valued.

But these valuation challenges are short-term in nature.

Tesla is positioned for a decade of hypergrowth ahead. If you look at consensus Wall Street estimates, Tesla’s EPS is expected to go north of $30 by 2030. My modeling suggests that is actually a conservative estimate. I think earnings will look more like $50 per share by 2030.

Based on a 30X forward earnings multiple and an 8% annual discount rate, that implies a 2021 price target for TSLA stock of $810.

Thus, Tesla stock isn’t so much overvalued, as it is just “forward-looking.” For investors with time on their side, then, near-term valuation friction on TSLA stock should not be a big concern.

Bottom Line on TSLA Stock

Tesla’s business has been on fire. Fourth-quarter numbers imply that the business remains on fire today, and the development pipeline strongly implies that the business will remain on fire for the foreseeable future.

So long as that remains true, TSLA stock will continue to shrug off valuation concerns and keep grinding higher.

On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.

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