Tesla (TSLA) stock is down about 3% in pre-market trading after the company posted a sharp earnings miss for the third quarter. While revenue climbed 12% year-over-year to $28.1 billion, earnings fell 31% to $0.50 per share, missing the $0.55 consensus estimate. The results have drawn mixed reactions from analysts. Some are cautious about Tesla’s high valuation, while others see a chance for recovery in 2026 as the company’s energy and AI businesses grow.
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UBS Analyst Cautions on Valuation
UBS analyst Joseph Spak kept a Sell rating and $247 price target on Tesla, warning that the stock’s price already reflects most of the excitement around its AI plans.
He said Tesla’s short-term performance still depends on its auto and energy business, not on its future AI projects. Spak also noted that Tesla gave very little new guidance, which he believes was a planned move as the company tries to shift investor focus from its car business to its growing AI ambitions.
Baird and RBC Analysts Remain Bullish
Baird analyst Ben Kallo maintained an Outperform rating and $548 price target, saying Tesla’s Q3 results were solid overall with record vehicle deliveries and strong energy deployments.
The 4-star analyst pointed out that auto margins improved and energy margins reached record levels, supported by rising global demand and power grid challenges in several regions. Kallo believes Tesla’s energy business will gain more attention through 2025 and 2026, even though long-term projects like Optimus and Robotaxi are still uncertain.
Similarly, RBC Capital analyst Tom Narayan also reaffirmed an Outperform rating and $500 price target, noting that strong car deliveries in the U.S. and China helped boost Tesla’s performance.
He added that the company plans to expand Robotaxi operations across major cities by year-end and increase global use of Full Self-Driving (FSD). Narayan said that while Optimus remains a challenge, Tesla’s scale and control over production give it an advantage in building humanoid robots and other AI-powered products.
Is TSLA Stock a Buy?
Turning to Wall Street, TSLA stock has a Hold consensus rating based on 15 Buys, 13 Holds, and 10 Sells assigned in the last three months. At $363.50, the average Tesla price target implies a 17.19% downside risk. The stock has gained 75.07% over the past six months.
