Tesla is falling even after earnings. What analysts are saying
Tesla is sliding despite its third-quarter results exceeding estimates, with Wall Street analysts feeling mixed on the stock following the report. The Elon Musk-led company reported adjusted earnings of 48 cents per share for the quarter ended September 30, topping the 43 cents expected by analysts polled by LSEG. Its revenue came in at $28.05 billion for the same period, slightly above the Street’s consensus estimate of $27.9 billion. Shares of Tesla were last down about 4% in premarket trading on Thursday, largely due to concerns over the company’s outsized investments into several of its emerging technology verticals. The stock is down about 14% year to date. TSLA YTD mountain Shares of Tesla are down 14% year to date. Tesla has plowed significant resources into developing its Optimus humanoid robot and robotaxi fleet, although none of those have served as major sources of revenue for the firm. Meanwhile, its major business verticals brought in less funds in the third quarter on a year-over-year basis, with the firm’s core automotive business seeing a revenue decline of 3% from the previous year. Its energy revenue also dropped 16% to $2.88 billion over the same period . Several analysts noted that slipping revenue could be offset by accelerating momentum in Tesla’s emerging technology verticals in the long-term. Near term, the outlook may be more volatile. “Elon Musk tempered expectations on the Optimus ramp-up expectations and Robotaxi tangible revenue impacts for a year, weighing on the stock, which traded lower after hours,” William Blair analyst Jed Dorsheimer, who has a market perform rating on the stock, said Thursday in a note to clients. “We remain big Tesla Energy bulls, but understanding the pace and economics of Robotaxi, Optimus … will continue to drive the valuation.” The analyst added that a potential merger between SpaceX and Tesla could drive value to the automotive stock. To be sure, others on the Street were more constructive on Tesla’s results. Deutsche reiterated its buy rating, along with Canaccord Genuity. The latter firm raised its price target on the stock to $442 from $410, signaling a gain of 14% from Wednesday’s close. Here’s what other analysts are saying about Tesla. Goldman Sachs: Neutral The bank’s $360 price target implies 7% downside. “Over the near to medium term, we expect profitability and FCF to remain somewhat pressured from higher opex and capex. In addition, while we expect improved growth from these areas to support an attractive long-term EPS CAGR, we also believe the magnitude and pace of that EPS improvement will be somewhat limited by competition (e.g. Tesla is facing several competitors in AVs, EVs, Energy and robotics). Finally, we see valuation as full.” HSBC: Reduce The bank’s $157 target signals 60% downside from Wednesday’s close. “Despite the soft reported growth rates, management keen to suggest an acceleration in growth is on its way.” Truist: Hold The bank kept its price target unchanged at $370. “Over the last few qtrs, TSLA’s transition from autos to AI became obvious, and that continued in Q3. While it initially looked like CapEx would make the point, this qtr there was a pivot – TSLA lowered its CapEx plans for the year, but ramped OpEx instead. Management sounded more optimistic than they have in a long time, but elevated OpEx for AI projects (FSD, Robotaxi, cybercab, Optimus, Cortex, and Terafab) dragged meaningfully on OPM. We continue to believe these investments will pave the way for TSLA’s AI transition, but they will weigh on margins and cash flow for a while.” JPMorgan: Neutral “Capex remains central to the debate: 2026 guidance was lowered to ~$20 bn from ~$25 bn+, citing capital efficiency, though commentary suggested a further ramp into 2027 and 2028 as TSLA continues funding robotaxi, Optimus, AI compute, and Terafab milestones – we believe investors are likely to come away with mixed feelings as the delay helps near-term cash burn but also suggests delays in investments that matter for fruition of long-term opportunities. We don’t sense a change to the Optimus ramp timeline vs. prior commentary, while Robotaxi ramp is keeping pace relative to investor expectations since the Cybercab launch.” Barclays: Equal Weight “We believe a key question that will need to be addressed is the path to unlock growth. Investors questioned Tesla’s cut to capex guidance in 2026, with Tesla now tracking to $20bn, vs prior guidance of $25bn+. While Tesla framed the cut as increased efficiency, some bears will frame the reduction as a slip in the production ramp – though we are less inclined to take this view.” Morgan Stanley: Equal weight The bank raised its price target to $410 from $400, signaling upside of 6%. “We continue to view sustained growth in unsupervised miles, fleet density, and safety performance as the most important indicators of progress toward commercial scale. We come away from the quarter more confident in our fleet size estimates through 2027 given the pace of progress demonstrated thus far.” Canaccord Genuity: Buy “We have updated our model to reflect several changes, including higher vehicle deliveries and higher margins in energy storage (per company commentary). As a result, our 2028E non-GAAP EPS moves to $11.06 (from $10.73). Other Mag 7 stocks are trading at ~20x 2028E EPS. We apply a ~40x multiple (from ~38x) to our $11.06 2028E non-GAAP EPS to achieve a price target of $442. We view this more than 2x multiple as reasonable given Tesla’s long-duration, generational growth opportunities in areas such as EVs, robotics, autonomy, energy storage, and “amazing abundance.” Deutsche Bank: Buy “Demand for Megapacks remains strong driven by data center expansions and grid constraints, with the highest- ever order rate and backlog. Tesla is almost sold out of Megapacks for 2027. Mr. Musk expects energy gross margins to “increase meaningfully,” and the CFO expects rising ASPs on data center demand to drive further margin improvement. We note that this is a more constructive stance than 2Q guidance indicating margins would normalize in the low to mid-20% range.”
