Tesla stock’s (NASDAQ:TSLA) price target has been raised to $939 per share by Piper Sandler following the electric car maker’s blowout first quarter earnings, which saw the company post $5.985 billion in revenue and earnings per share of $1.24. The financial firm also maintained its “Overweight” rating on TSLA.

Prior to the Q1 2020 Earnings Call, Piper Sandler held an $819 per share price target for the electric car maker. Following impressive first quarter results, analyst Alexander Potter stated that “profitability and capital efficiency necessitate upward earnings estimate revisions.”

Apart from these, the analyst also explained that “We are moving our estimates higher, primarily to reflect Tesla’s persistently stout gross margins.” Potter further mentioned that Tesla’s CapEx continues to be lower than expected despite aggressive capacity expansion. This is an incredibly poignant observation, particularly as Tesla is undergoing aggressive expansion in Gigafactory Shanghai with the construction of its Phase 2 building.

Piper Sandler increases $TSLA price target to $939, up from $819.

• "We are moving our estimates higher, primarily to reflect #Tesla's persistently stout gross margins."

• "TSLA is still the top pick in our coverage following a stronger-than-expected performance in Q1."

— Tesla Daily (@TeslaPodcast) April 30, 2020

Ultimately, the Piper Sandler analyst stated that Tesla’s first quarter results are a big sign that competitors may soon find it more and more difficult to compete with the Elon Musk-led automaker. “We are increasingly starting to ask ourselves: with Tesla in this market, how will competitors stay relevant?” Popper remarked.

It’s not just Piper Sandler that has adopted a more bullish stance on Tesla stock following the company’s first quarter earnings. Goldman Sachs raised its PT on Tesla from $864 to $925. Credit Suisse adjusted its target from $580 to $700. JMP Securities was even more optimistic, raising its price target from $840 per share to $1,020 per share.

RBC Capital, which only had a $380 price target, has adjusted its estimates to $615 per share. Wedbush now has a $600 target, from its conservative $425. And Oppenheimer, which had a $684 per share price target, has adjusted its estimates for $968 per share.

A significant amount of optimism surrounding Tesla came from the company’s strong demand in China, which is being driven by its locally-made Model 3. However, some uncertainties remain with regards to the company’s immediate future in the United States, considering that its main factory, the Fremont plant, remains closed under Alameda County’s ongoing halt of non-essential businesses.

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Ma. Claribelle Deveza holds zero share of Tesla, Inc., and currently (at the time of this article's publishing) holds zero options or securities in Tesla Inc. and/or its affiliates.