Tesla (NASDAQ:TSLA) will take center stage on Wall Street this afternoon, with the EV giant set to dial in its Q3 report once the trading action comes to a halt.
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The readout comes in the wake of record-breaking quarterly deliveries, although that achievement was not based solely on outsized demand.
“This was due primarily to a ‘push-forward effect’ from consumers who rushed to purchase or lease EVs ahead of the $7,500 EV tax credit, which expired on 9/30,” Cantor analyst Andres Sheppard explained.
Year-to-date, Tesla has produced and delivered about 1.2 million vehicles worldwide, and Sheppard anticipates a weak fourth quarter is in the cards. For 2025, the analyst expects total deliveries to come in below 2024’s ~1.8 million units. As for the main metrics, the Street is calling for revenue of ~ $27.8 billion, a GAAP gross margin of 17.4%, and adj. EPS of $0.59.
But for Sheppard, the numbers take a backseat to more pressing matters. More than anything, Sheppard’s main focus will be on Musk’s commentary, especially any updates regarding the timing of “key material potential near-term catalysts,” such as the ongoing rollout of the Robotaxi in Texas and California, FSD adoption in China and Europe, the 2026 launch of the Cybercab, the timeline for the humanoid Optimus Bot, and the ramp-up of the lower-cost Model 3/Y.
On that last subject, Sheppard thinks Tesla’s launch of its long-awaited lower-priced vehicles comes at an “opportunistic time.” The company recently introduced “Standard” versions of the Model 3 and Model Y, aimed at a more price-conscious consumer. The Model 3 Standard starts at $36,990, while the Model Y Standard has a starting price of $39,990 in the U.S. To reach these lower price points, the vehicles have simplified or removed certain features, including Autosteer, adaptive high beams, and premium interior options. They also have slightly reduced range and performance, with the Standard Model 3 offering approximately 321 miles (compared to 363 miles for the Premium Model 3) and the Standard Model Y about 321 miles (357 miles for the Premium Model Y).
“Still,” Sheppard went on to say, “we believe the timing of these introductions is significant, and we believe the new Model 3 and Model Y Standards can help meaningfully stimulate demand by attracting budget-conscious buyers after the recent removal of the $7,500 tax credit on 9/30.”
Lastly, early this month, Tesla reported deploying 12.5 GWh of energy storage products in Q3, representing a new company record. This exceeded both Sheppard’s and the Street’s expectation of 11.5 GWh and 10.9 GWh, respectively, and compares to roughly 6.9 GWh in 3Q24. Year-to-date, Tesla’s energy storage deployments have already surpassed the total for all of 2024, and the analyst continues to expect the segment will generate over $11 billion in annual revenue.
Bottom line, ahead of the print, Sheppard maintained an Overweight (i.e., Buy) rating on the shares, although somewhat confusingly, his $355 price target factors in a one-year drop of 20%. Watch out for a possible revision to Sheppard’s model once the results are in. (To watch Sheppard’s track record, click here)
Meanwhile, the Street’s consensus sits at Hold (i.e., Neutral), based on 15 Buys, 13 Holds, and 10 Sells issued over the past three months. After a 97% rally since April’s low, the average price target of $365.82 implies ~16% downside from current levels. (See TSLA stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.