Tesla, Inc. (NASDAQ:TSLA) has been riding high for the better part of 2025. Indeed, ever since CEO Elon Musk announced his intention to “significantly” decrease his governmental responsibilities on April 22 and refocus on the company, TSLA’s share price has gained over 90%.
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That’s not to say that there haven’t been some hiccups along the way. Notably, Tesla’s EV deliveries took a few steps backward during the first half of the year.
However, these numbers improved dramatically during Q3. Heading into Tesla’s Q3 2025 earnings report yesterday, the company had already announced that its 497,099 deliveries had broken a company record.
As Tesla pulled back the curtain behind its Q3 performance yesterday, revenues of $28.09 billion were up 11.6% year-over-year and beat projections by $1.39 billion. That was only half of the story, however, as Tesla’s Non-GAAP EPS of $0.50 missed by $0.06.
The market was clearly disappointed, and TSLA’s share price has dropped by a few percentage points in the pre-market session. Top investor Jonathan Weber didn’t find this EPS miss too surprising, and remains bearish overall on the company’s prospects.
“I believe that Tesla is not an appealing investment right here, considering the high valuation that implies an extremely strong business performance,” asserts the 5-star investor, who is among the top 2% of stock pros covered by TipRanks.
Weber readily acknowledges the growing EV revenues as well as the booming energy business, where revenues increased by 44% year-over-year. Though the investor points out that deployed storage grew by more than 80%, he also predicts that economies of scale should allow the company to improve efficiencies as the business grows.
But while the EV volumes and revenues grew, Tesla’s profit performance moved in the opposite direction. In fact, Tesla’s operating margin in Q3 was 5.8%, which Weber reminds investors is a little more than half of what it was just one year prior.
“Tesla clearly isn’t able to adequately protect its profitability in the current market environment, as cost pressures, partially due to tariffs, hit the bottom line heavily,” adds the investor.
He expects the profitability equation to grow even worse in Q4, as EV sales will likely take a hit due to the expiration of the $7,500 EV tax credit at the end of September. This leads to a Price-to-Earnings multiple of some 250x for a company with worsening earnings. Weber has one word for this valuation: “ugly.”
While robots, autonomous driving, and AI are all lucrative possibilities for the company in the future, the investor doesn’t see this playing out in the near term.
“I think that Tesla has too many problems and headwinds for a company that is priced for explosive profit growth,” sums up Weber, who is rating TSLA a Sell. (To watch Jonathan Weber’s track record, click here)
Wall Street remains split on TSLA. With 15 Buys, 13 Holds, and 10 Sells, TSLA carries a consensus Hold (i.e. Neutral) rating. Its 12-month average price target of $367.61 implies a downside of ~16%. (See TSLA stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.