Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

U.S. stocks lost ground on Wednesday, with the benchmark S&P 500 index falling by roughly two-thirds of a percentage point. The narrower Dow Jones Industrial Average (^DJI -0.92%) declined by 0.56%. Shares of automaker Tesla Motors (TSLA -0.95%) underperformed the broad market going into this afternoon's fourth quarter earnings announcement; however, the stock's performance in the after-hours session -- up 12% -- suggests the shares will substantially outperform the market tomorrow.

Before discussing the stock market's reaction, let's cover the headline numbers: On an adjusted basis, Tesla earned $0.33 per share, handily beating the $0.21 Wall Street analysts had been looking for. The company also beat on the top line, with revenues of $761 million -- 11% above the consensus estimate.

It's worth noting that the company was also profitable on a cash basis, generating $40 million in free cash flow (operating cash flow minus capital expenditures) -- the second consecutive quarter in which it is free cash flow positive. On the earnings call, CFO Deepak Ahuja told investors and analysts that the company expects to generate "significant cash flow," before adding that it was too early to provide any numbers.

Certainly, profitability continues to improve: Tesla's automotive gross margin of 25.2% (25.8% on the basis of generally accepted accounting principles) in the fourth quarter was also ahead of its own 25% target. Looking ahead, the company ratcheted up its target for this profitability metric to 28% (GAAP and non-GAAP), to be achieved in the fourth quarter of this year. On the call, CEO Elon Musk said achieving that figure is simply a matter of scaling up.

And speaking of scale, Musk said Tesla is in the process of building a second assembly line for the model S that should be operational in the second half of the year, which will be instrumental in raising production to 1,000 vehicles per week by year end, from 600 per week presently. Battery cell supply will, however, remain a constraint on production through the first half of the year, but it's expected to improve in the second half -- Musk indicated that the company will provide an update on this issue next week.

Are these results and outlook worth a worth a 10% upward revaluation in Tesla shares? As an old-school value guy, I simply don't see how one can pin down a valuation for this company with any degree of accuracy -- certainly not to within 10%. However, the company does bring together a principled, visionary leader with the capacity to execute on his vision -- a rare combination. The most recent set of results bear this out and add credibility to this story stock. I would not feel very comfortable owning Tesla's stock at its current valuation, but this looks like one of the rare "hyper-growth" stories that has a chance of growing into its valuation.

One thing I can say with a high degree of confidence, however, is that Apple (AAPL 0.62%) won't be acquiring Tesla Motors. A weekend report in the San Francisco Chronicle, according to which Apple's head of mergers and acquisitions, Adrian Perica, met with Elon Musk last spring helped Tesla's stock break $200 yesterday for the first time.

Given their positions, I'd be more surprised to learn that the two executives had never had a meeting together; without any additional information concerning the content of the meeting, I think we can assume it remained very "high-level." Sure, both companies are rule-breakers in their respective industries, but I'd argue that those industries are simply too far removed from one another to justify a tie-up. If you own Tesla shares because you're betting the company will be acquired, that's a mistake; besides, Tesla is proving it can do just fine on its own.