There were a lot of surprises in Tesla’s (TSLA) third quarter earnings report, which is the last one with Elon Musk as chairman for at least three years, although he will still remain on as CEO.

• Surprise earnings per share (EPS) of $1.75 versus a loss of $3.70 per share a year ago and an expected loss this quarter
• Surprise Model 3 Margin of 20% versus the 15% they had previously guided for
• Revenue for Tesla’s Energy segment rose 26% from a year ago
• A sped up timetable for the Chinese Gigafactory

It was impressive enough that Tesla managed to turn in a profit during a quarter where it was expected to lose money. Even more impressive, though, was that there now appears to be clear roadmap to something more important: sustainable profitability. This wasn’t just some random blip of profitability thanks to financial engineering or one time events. With the improved Model 3 margins, it looks like Tesla can actually make money selling the car going forward and maybe even finally get around to producing the $35k version of it. If demand for the Model 3 remains strong (granted, that’s a big “if”), then Musk’s previous statement that Tesla would profitable “every quarter from here on out” suddenly seems a lot more believable.

This isn’t to completely dismiss the financial risks that Tesla faces. Tesla still has an enormous amount of debt, much of it coming due in the coming months. At the same time, credit rating continues to slide, which makes raising money more difficult and costly. Even if Tesla is sustainably profitable going forward, it’s unclear whether it will be profitable enough to meet its obligations while continuing to fund the aggressive expansion plans that they have.

In many ways, Tesla is one of the riskiest positions in the Freedom Portfolio. It’s what some consider to be a “battleground stock“. Tesla is one of the most shorted stocks in the market, which means there are a lot of people who think the company is very overvalued right now and are betting that the share price will go down in the near future. Some are so passionate as to throw around the word “fraud” in terms of Tesla and Elon Musk.

On the opposite side, there are just as passionate Tesla bulls who seem to think that Tesla can do no wrong and that every setback is a secret conspiracy by people who are short the stock. To add gasoline to the fire, Elon Musk has been very public regarding his feelings about people who are short Tesla.

In short (no pun intended), Tesla is a very volatile stock with numerous passionate groups of people on either side who can push up a lot or down a lot on the slightest bit of news or rumor. It’s certainly not a stock for the faint of heart.

Ultimately, I think the bulls win out on this one. Yes, the company has taken on a lot of debt and a lot of the bull case does rest on a single man who might be dangerously mixing alcohol and ambien. I think much like how Apple (AAPL) survived and thrived after Jobs’ death, though, Tesla is more than just one man at this point. Ignoring all the noise on either side and it becomes clear that Tesla is making really revolutionary cars that people love.

I think the bull case for Tesla can be summed up in this story: Some members of my family recently went on a test drive for a Model 3. I was along for the ride in the back seat. After the test drive was over, this was an actual quote from one of the family members:

“I think my next car will be a Tesla! Everything else seems like a dinosaur.”

P.A.U.L. Score

Protected: 3

It’s a little hard to gauge how much of an advantage that Tesla has in terms of electric vehicles. They had a decent head start with the Model S and Model X, but their competitors are definitely catching up and much has been made about established players beating Tesla to market (in terms of the Model 3) with cars like the Chevy Bolt and Nissan Leaf. However, despite arriving first, sales of those cars don’t seem to come close to sales of the Model 3 at all. Even more impressive competition seems to on the horizon, though, so it remains to be seen if Tesla can maintain their lead. Will the gigafactory, their experience making electric vehicles and experience with automation give them a sustainable advantage? Tesla has been solely making electronic vehicles for years, whereas their competition in most cases has to transition from making cars with internal combustion engines. How long will that transition take? Only time will tell.

In the meantime, though, Tesla does have some advantages that seem a little more durable. Their supercharger network gives them a big selling point for people who are worried about having to “re-fuel” on long road trips. Tesla also has been collecting a ton of data (over one billion miles worth) from it’s autopilot system, which could be invaluable in allowing it to compete with the likes of Waymo for self-driving cars.

Alternatives: 5

This is where I think Tesla really starts to shine. Right now they are primarily known as an electric car company, but they are also becoming a major player in terms of battery production thanks to the gigafactory. They also have an often overlooked energy branch working on solar panels (including the solar roof) and the Powerwall. In a world that seems to be transitioning more and more to renewable power, that could very easily be an important growth engine in the future. And while it may not necessarily be a huge opportunity in terms of growth, it’s worth noting that for years now Tesla has been disrupting the way we buy cars in terms of challenging the dealership model. Just one more way that Musk and Tesla is willing to try new things and not be beholden to the old ways of doing thing.

That’s not even counting the various other initiatives that Musk has floated as possibilities for Tesla in the future. They have announced an electronic semi that might even include a caravan mode that would reduce the need for drivers, which would be very intriguing consider the current shortage of truck drivers. Additionally, Musk has mentioned competing with companies like Uber and Lyft in the future in terms of ride-hailing services. Those are some massive opportunities that Tesla has to not only revolutionize the vehicles we drive, but also transportation and energy in general.

Understanding: 3

On the surface, Tesla would appear to be a pretty simple company to understand: They make cars that people buy. On the other hand, there’s a lot of complicated finances going on in terms of convertible bonds and loans made by Solar City before it was acquired by Tesla. I know enough about those complicated finances to know it’s a huge potential problem, but that’s about all I understand about it.

Long Runway: 5

Electronic vehicle sales in the United States are currently around 2%. Assuming that electric vehicles are the future, which is admittedly a bit of an assumption, that’s a huge runway available to Tesla even if they only capture a small fraction of the market. There’s reason to believe that they should be able to capture more than a small share, though.

The United States isn’t the only market, though, and while electronic vehicle sales vary greatly by country, worldwide the percentage is still around 2%. As mentioned earlier, Tesla is accelerating plans to expand into China. If they can become a major player there, that’s another potentially huge market.

But as mentioned under “Alternatives”, Tesla isn’t just about cars. They’re also positioned to benefit from a transition to renewable energy or to be a leader in self-driving cars in the future. There are a lot of ways for Tesla to succeed going forward, and a lot of opportunities ahead of it, which is why I give it a perfect 5 here.

Total Score: 16

A pretty good score that puts Tesla even with my second largest holding (Netflix). As I mentioned before, though, I also acknowledge that there is a fair amount of risk involved with Tesla that might not necessarily be there with other companies. This is definitely a long term holding for me, though. Barring some unforeseen developments, it’s something I don’t plan on selling for many years.