Tesla Motors Inc (NASDAQ:TSLA) Wednesday after the close  posted big beats on deliveries, revenue, and earnings, driving the stock up approximately 25% in after-hours trading. Tesla Motors Inc (NASDAQ:TSLA)s 1Q results demonstrated significant progress on costs in its first quarter at a full production run rate. The company raised FY2013 delivery guidance in a show of confidence and things are just getting started according to some analysts.

Tesla Motors

Tesla Motors Inc (NASDAQ:TSLA) big 1Q beat on all metrics

Tesla Motors Inc (NASDAQ:TSLA) posted 1Q revenue of $562 million vs. Jefferies and the Street of $490 million. Revenue benefited from $68 million of ZEV credit sales and Model S deliveries of 4,900 units vs. guidance for 4,750 units. Excluding the credits, implied ASPs were approximately $99k per vehicle. Automotive gross margins came in at 16.8% and 5.2% ex-ZEVs; total company gross margin was 17.1%. The quarter benefited from a one-time gain on the DOE warrant liability; excluding this gain and stock-based comp, adjusted EPS came in at $0.12 vs. the Street at $0.04. The company is no longer providing reservation data, but indicated that orders are coming in at a rate of over 20,000/year globally.

The story continues to gain credibility

Tesla Motors Inc (NASDAQ:TSLA) continues to hit target after target, and 1Q provided yet more validation of management’s guidance. At this early stage in the game, management is rightly focused on improving manufacturing efficiency and lowering costs with production of the Model S humming along at 400+ cars/week.

Analysts at Jefferies believe that as sales and service networks are becoming more established, they expect consumer awareness of the brand to grow, and word of mouth to increase as more cars hit the road. TSLA now has 34 stores and 41 service locations, and plans to open 15 more stores this year with half in Europe and Asia. The first European deliveries are expected around mid-year.

Jefferies Adjusting estimates for lease accounting

Analysts at Jefferies expect Street estimates to reset for sales made under TSLA’s new quasi-lease program. The current lease take rate is approximately 25%. The deferred revenue recognition will result in a net loss on a GAAP basis in 2Q and new estimates reflect these impacts. The company has guided to 2Q gross margin in the high teens, including the impact of lower ZEV sales. Gross margin in 4Q is still expected to be 25%, with no benefit from ZEV credits. Going forward, we expect the company to direct investor focus to deliveries, margin improvements, and cash flows.

Jefferies raises the PT on TSLA to $70 (up from $68) based on 25x their 2015 pro forma EPS estimate of $2.80, and a DCF model. This is the second time this week that the firm raised their price target on Tesla shares.

Further reading- Google’s Self-Driving Tesla’s Cars, Still Far Ahead