Q3 profits fall short of expectations + unclear growth narrative Tesla, Inc. (TSLA.US) receives mixed reviews from Wall Street after earnings.

Although Tesla, Inc. (TSLA.US) set a new record for delivery volume in the third quarter, the company's quarterly profits fell short of expectations, disappointing investors. As of the time of writing, Tesla, Inc. was down nearly 4% in pre-market trading on Thursday. According to the financial report, Tesla, Inc.'s third-quarter overall revenue increased by 12% year-on-year to $28.1 billion, higher than the analysts' average expectation of about $26.3 billion. However, the adjusted earnings per share decreased by 30% year-on-year to $0.50, falling short of the analysts' average expectation of $0.54. Some seasoned analysts believe that Tesla, Inc. currently lacks a reliable growth narrative and plan, and with weak profits and still vague artificial intelligence and humanoid Siasun Robot & Automation narratives, it is difficult to support the current high valuation, making the company's stock price vulnerable to rapid market adjustments and negative fundamental data. During the financial report conference call, Tesla, Inc. management provided minimal guidance to investors. Musk reiterated his grand and futuristic vision for Tesla, Inc., as he has done in previous earnings conference calls, emphasizing these futuristic points. However, this time, the market seems to have lost patience. Senior stock research analyst Garrett Nelson from Wall Street research firm CFRA said, "We are entering a period of uncertainty regarding Tesla, Inc.'s short-term and medium-term profit growth trajectory." After Tesla, Inc. released this latest report card, Wall Street banks had mixed opinions on the stock. Investment bank Wedbush, which has always been bullish on Tesla, Inc., analyst Dan Ives maintained his extremely bullish stance. Dan Ives emphasized that Tesla, Inc. has made important incremental progress in its artificial intelligence strategy, with its FSD (Full Self-Driving) fleet driving over 1.3 billion miles this quarter, bringing its total FSD driving distance to 6 billion miles, establishing a massive database to enhance FSD capabilities. He said, "We still believe that in the most optimistic scenario, Tesla, Inc.'s market value could reach $2 trillion by the beginning of 2026 and surpass $3 trillion by the end of 2026, at which point Tesla, Inc. will enter its 'golden AI era'." Morgan Stanley analyst Adam Jonas said that Tesla, Inc.'s performance generally met market expectations, enough to maintain consensus estimates. He pointed out that Tesla, Inc. is "decently exiting traditional car business" while maintaining strong free cash flow. Looking ahead, he said that the company's fate still depends on whether Musk can "reignite the flame in the autonomous driving field," while competitors come from the "big seven of the US stock market" and more tech companies. Jefferies Financial Group Inc. took a more neutral stance, reiterating its "hold" rating on Tesla, Inc. Analyst Philippe Houchois said, "Tesla, Inc.'s current car business is no longer the dominant factor in valuation, but it can still generate free cash flow (along with energy storage and carbon credit revenue) to exceed the required funds for future development." On the other hand, Wells Fargo & Company analyst Colin Langan is not optimistic about Tesla, Inc. Colin Langan said that given the continuous deterioration of Tesla, Inc.'s core business, he maintains a "sell" rating on the stock. He pointed out that the commercialization and scaling process of Siasun Robot & Automation's robotaxi and humanoid Siasun Robot & Automation (Optimus) are expected to be slower than previously envisioned. "There is very little discussion in the financial report about the core car business, and the growth operating leverage of this business is surprisingly limited, mainly affected by pricing, tariffs, and product mix. Overall, we believe there is a lack of momentum to continue supporting stock price increases." Furthermore, market analyst Bill Maurer also warned that Tesla, Inc.'s stock valuation remains extremely high, and weak short-term profits may suppress the stock price in the short term. "Even if Tesla, Inc. is considered a partially tech company, considering its extremely low profit margins, the current stock price is still outrageously expensive."