Baird analyst Ben Kallo was already bullish on Tesla (NASDAQ:TSLA). He had an outperform rating on the stock and a $411 price target. But now he's even more optimistic, reiterating his outperform rating and initiating a new, higher 12-month price target.

To back up his bullish call, Kallo lists a range of catalysts for the stock in 2019. Key to his thesis, however, is that the automaker's surprise third-quarter profit wasn't a fluke, but rather a preview of more sustainable profits to come.

Tesla vehicles, including the Model 3, Tesla Semi, Model S, and Model X

Tesla vehicles. Image source: Tesla.

The path to $465

"We believe the narrative will continue to change from 'TSLA will never make money' to 'TSLA can be sustainably profitable," Kallo said in a note to investors (via CNBC) on Thursday.

Along with the note, Kallo raised his 12-month price target to $465. This represents 25% upside from where shares are trading at the time of this writing on Thursday.

Kallo continued:

We do not believe the strong Q3 results were a "flash in the pan" and think TSLA could maintain profitability. Further execution will reinforce investor belief the company can be self-supportive, which should be a positive catalyst.

But sustained profits aren't the only catalyst Kallo is betting on. Other potential drivers for Tesla stock include strong growth in vehicle deliveries in the first half of 2019, likely a period of positive estimate revisions from analysts, the start of Model 3 deliveries in Europe, the beginning of production in China, and the possible inclusion of Tesla stock in the S&P 500, Kallo said.

Big plans

It's true that Tesla has a lot on its plate for 2019.

Starting with the growth in vehicle deliveries, Tesla is up against extremely soft comparisons for Model 3 deliveries. During the first half of 2018, Tesla delivered under 27,000 Model 3 units. This compares to about 56,000 Model 3 units delivered in the third quarter of 2018 alone. Looking ahead, Tesla expects Model 3 production and deliveries to continue rising.

In addition, Tesla said in its third-quarter shareholder letter that it expects to be profitable and cash flow positive yet again in Q4. Indeed, management expects its cash position at the end of the period to be "at least flat" even after paying off $230 million of convertible notes and spending about $700 million on capital expenditures. This bodes well for management's expectation to be sustainably profitable.

Longer-term, Tesla expects growth to come from beyond Model 3 as well. The company's product road map for planned launches over the next few years notably includes a Tesla Semi and a small SUV with a price close to Model 3.

Of course, business growth doesn't automatically translate to a higher stock price. The electric-car maker will need to follow through on its plans to become sustainably profitable while executing on its ambitious vision in order to impress investors. Furthermore, in light of Tesla stock's pricey valuation, the company will need to do more than become sustainably profitable -- it will need to prove that it can continue gaining market share while growing profits over the long haul.