Key Takeaways
- Tesla stock is up 13% in the past month on a delivery beat, SpaceX merger talk, a Barclays upgrade and robotaxi news.
- Much of the gain rests on a SpaceX deal that has no terms yet, while Tesla’s third-quarter profit fell from a year ago.
- Tesla’s forward P/E is far above its five-year average, and consensus earnings through 2028 stay below what Tesla earned in 2022.
- Buying more makes sense only once the two companies’ special committees put a real premium on paper, and the Dallas Cybercab launch in November is the next marker.
Tesla (TSLA) stock is up 13% in the past month, while the S&P 500 barely moved and the Nasdaq 100 slipped.
Most of that came from talk that SpaceX (SPCX) will buy the company, and from robotaxi news that hasn’t reached Tesla’s earnings.
Deliveries got it started
Tesla delivered 486,532 vehicles in the third quarter, it said before the open on Oct. 2: down 2% from a year ago, but up from the second quarter and well above the roughly 461,000 analysts expected.
Then the SpaceX talk took over
Barclays analyst Dan Levy sketched an all-stock deal, with SpaceX as the buyer, on Oct. 14. On SpaceX’s Oct. 20 call, Elon Musk said both companies had formed special committees of independent directors to weigh a merger, and called one “a good idea.”
On Oct. 26, Levy upgraded Tesla to Overweight and raised his target to $450 from $370. He cited the auto business, Megapacks and robotaxis, but the deal leads his case: “We believe the anticipated merger is now a key part of the Tesla bull case.”
There are no terms yet. A Tesla vote would need a majority of all outstanding shares, a bar Musk himself called high, and the agenda for Tesla’s Dec. 3 annual meeting carries no merger item.
In Levy’s all-stock sketch, Tesla holders would be paid in SpaceX stock. SpaceX’s third-quarter revenue jumped 161% to $14.6 billion, but Barclays, citing Bloomberg consensus, has it burning $17 billion of free cash flow in 2030 while Tesla brings in $12 billion.
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The quarter itself was mixed
Tesla’s own third-quarter report, out after the close on Oct. 21, was less exciting. Revenue was flat at $28.05 billion. GAAP net income fell to $787 million from $1.37 billion, and free cash flow to $1.53 billion from $3.99 billion.
Adjusted EPS of $0.48 beat estimates, the car backlog hit a four-year high, and active FSD subscriptions rose to 1.74 million from 1.04 million. But management cut its 2026 capex plan to about $20 billion from more than $25 billion, and Musk said Optimus is at least a year from making 20,000 robots a week.
Robotaxis did the rest
After the close on Oct. 26, ARK Invest reaffirmed its $4,400 price target for 2031, with about 80% of Tesla’s value that year tied to robotaxis. Musk posted “A Storm of Cybercabs” on X overnight, and Tesla said its Texas plant now turns out Cybercabs faster than it can deploy them.
Deploying them is the hard part. On the third-quarter call, management counted six Robotaxi cities. In January, Musk had expected driverless service in “dozens of major cities” by year-end.
I’d wait for the terms
The valuation already counts on a lot of this. Tesla traded at 190x forward earnings at the Oct. 27 close, against a five-year average of 108x:
Analysts expect normalized EPS to climb from $1.74 in 2026 to $3.20 in 2028, still below the $4.07 Tesla earned in 2022:
Musk expects robotaxi revenue to become noticeable only by the second quarter of 2027, so this month’s news shouldn’t move those numbers much.
And the stock ended the month right at Wall Street’s average target of $411:
My take: I wouldn’t buy more here, and trimming makes more sense than adding. Without a deal, Tesla has to hold that multiple on its own earnings, which fell last quarter.
A merger with a real premium would change the math. Until the committees put one on paper, the next markers are the Dallas Cybercab launch, which management set for November, and fourth-quarter deliveries in early January.
So what is Tesla stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
