Tesla (TSLA  ) reported Q1 earnings that came in better than expected on the top and bottom-line. However, shares sold off as the company warned about some production issues that could delay the launch of its newest models. The company's net income also was boosted by the sale of its bitcoin holdings and regulatory credits.

Inside the Numbers

In Q1, the company reported earnings per share of $0.93 which topped analysts' expectations of $0.79 per share. Revenue also came in above expectations at $10.4 billion vs $10.3 billion, which was a 74% increase from last year.

Tesla bulls are encouraged that this marks the company's seventh straight quarter of profitability, while detractors would say that net income was $438 million but the company generated $518 million from regulatory credits and another $101 million from taking some profits on its bitcoin position. Notably, these are one-off events that are disconnected from the company's underlying operations.

However, the company continues to meet its targets in terms of vehicle deliveries. In Q1, Tesla delivered 184,800 Model 3 and Model Y cars which beat analysts' forecasts. It also said that a new version of its Model S should begin to be delivered in May with a new Model X coming in Q3. This timeline has been pushed back due to supply chain issues.

Overall, the company expects more than 50% vehicle delivery growth in 2021. Its Q1 results indicate that it remains on track towards its goal of delivering 750,000 vehicles this year. One potential obstacle is the chip shortage which has adversely affected many auto manufacturers.

Stock Price Outlook

Tesla's stock was one of the best performers from the bottom in March 2020. From its low to its peak in late January, the stock climbed 1,162%. The drop in interest rates resulted in inflows for growth stocks. Tesla is the largest EV company in the world and has a leading position in future growth segments such as autonomous vehicles, electric trucks, and batteries. If it can maintain its position as these markets mature, it has a chance to become the most valuable company in the world.

Still, in the near term, Tesla seems to be digesting these massive gains of the past year. From its January high, the stock declined by 39% into early March. Since then, the stock has climbed by another 30%.

Most likely, Tesla's stock will remain range-bound for many months. This will make it a good vehicle for trading, but investors may find better opportunities elsewhere. Simply put, a lot of good news has been priced into Tesla's stock which means that earnings and operational performance will determine whether the market's optimism will be validated.