Key Takeaways
- Tesla delivered 486,532 vehicles in the third quarter, beating consensus.
- The beat suggests Tesla’s car business has stemmed the bleeding after revenue shrank in 2025.
- The main risk is margins: Tesla’s operating margin fell from 16.8% in 2022 to 4.6% in 2025.
- At 189x forward earnings, the 32% upside case depends on earnings growing into the multiple, and the coming earnings report is the next test.
Tesla (TSLA) shares are finally getting some love since announcing last week that it delivered 486,532 vehicles in the third quarter, a surprise beat that’s some of the best news the embattled automaker has had in some time.
That’s a big deal for a stock that was down about 20% in 2026 heading into the report. Revenue shrank in 2025, and for most of this year the bull case has leaned on robotaxis and Optimus.
This quarter puts the car business back in that case. Ish.
What exactly happened
Tesla announced 486,532 vehicles delivered in the third quarter (consensus was ~461,000). This is still down slightly from ~497,000 in the year-ago quarter.
Gene Munster at Deepwater Asset Management said that these “are the latest sign the EV winter is thawing for Tesla (and $RIVN), while traditional car makers remain in a deep freeze.”
He noted that he expects Tesla to beat Street estimates of 9% growth in CY2027 – “I expect it will be above 15%” – and that Rivian (RIVN) is looking strong with deliveries up 46%.
Wall Street consensus has Tesla’s overall revenue (of which, of course, car sales are just a part) climbing from $94.8 billion in 2025 to $106 billion this year, then about 14% more to $121 billion in 2027, and $142 billion by 2028…
After three flat-to-down years, that’s a growth company again, if the analysts are right.
Here’s the catch
Of course, there’s an easy way to sell more cars: cut the price.
So the number I care about most in the coming earnings report is the margin line. Tesla’s operating margin has come down hard over the last five years…
From 16.8% in 2022 to 4.6% last year. That’s the line I’ll be watching on earnings day, much more closely than the unit count.
If this quarter’s beat was bought with lower prices, it’ll show up there first.
The case for 41% upside
Let’s face facts: Tesla isn’t a cheap stock on earnings – especially given the lack of growth the last few years:
At over 180x forward earnings, it’s trading well above its own five-year average of 107x, though below the (ridiculous) peak of 243x it hit in December 2025. So an upside case has to depend on some actual underlying business growth, because honestly I could see more multiple compression from here.
That’s why this delivery beat matters so much. If the car business is growing again and margins stop falling, earnings can grow fast enough to carry the stock higher even if the multiple comes down.
Here’s how I get to 32% upside, using TIKR’s proprietary valuation model:
- I’m working off consensus revenue growth (14.4% annual revenue growth through 2029)
- Assuming operating margin rebounds to 7.3%, which I think is pretty conservative with FSD and other software opportunities for Tesla
- And assuming the forward P/E comes down to 133x…
You end up with a $500 price target and 32% upside:
And honestly, that seems pretty conservative to me.
So I think there’s upside to be had beyond even those modest gains.
So is the EV winter over? For Tesla, I think the third quarter says yes. Now we’ll just have to see if (A) the same holds true for Rivian, and (B) what we learn from the next earnings announcement.
So what is Tesla stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what Tesla could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
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!
