Tesla (TSLA) disappointed investors and analysts with a huge third-quarter earnings miss. While sales reached record highs, earnings dropped 31% year-over-year to $0.50 per share, below analysts’ consensus estimate of $0.55. The electric vehicle (EV) maker’s shares fell in after-hours trading following the weak results. The sharp drop in earnings overshadowed otherwise strong delivery figures, prompting analysts to reassess Tesla’s near-term outlook.
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After the report, Jefferies analyst Philippe Houchois reiterated his “Hold” rating on TSLA, with a price target of $300, implying a massive 31.7% downside potential from current levels. He was particularly disappointed by the earnings call, which he described as “more repetition than news.”
Houchois is a five-star analyst on TipRanks, ranking #618 out of 10,084 analysts tracked. He has a 54% success rate and an impressive average return per rating of 15.90%.
Tesla’s Updates Failed to Impress Investors
Tesla’s earnings call was focused heavily on Robotaxi and artificial intelligence (AI) initiatives, but CEO Elon Musk offered few new details. Musk said Tesla is prioritizing AI and self-driving technology over short-term profits, citing rapid progress in its Robotaxi program and production plans. He also announced the AI5 chip, expected to be 40 times faster than its predecessor, AI4.
However, Houchois noted that investors were hoping for more concrete updates, such as timelines for new EV models, progress in bringing Optimus to market, specific Robotaxi metrics, and insights into demand for Tesla’s energy products like Megapack and Powerwall.
He also highlighted that Tesla’s slight EBIT (earnings before interest and taxes) and margin miss was partly due to $238 million in various non-recurring charges. Houchois noted that while Tesla’s core automotive business is no longer the primary driver of its market valuation, it still produces enough free cash flow to fund the company’s ongoing AI, robotics, and future technology initiatives.
Is Tesla a Good Stock to Buy Right Now?
On TipRanks, TSLA stock has a Hold consensus rating based on 15 Buys, 13 Holds, and 10 Sell ratings. The average Tesla price target of $367.61 implies 16.3% downside potential from current levels. Year-to-date, TSLA stock has gained 8.7%.
