Key Takeaways
- By Gary Black’s count, Tesla stock gained $23 per share between Friday morning and Monday after a third-quarter delivery beat of 25,000 vehicles.
- Black is a longtime Tesla bull, and he now says the stock is overvalued at 234x his 2026 earnings figure, given the earnings growth he expects.
- TIKR puts Tesla’s forward P/E at 205.9x, nearly double its five-year average of 107.2x.
- Black’s own model says the beat is worth $32 a share. The stock has already priced in most of that, so the next earnings report matters more.
Tesla (TSLA) has had a good week: a third-quarter delivery beat, plus oil back above $100 a barrel, which has drivers looking harder at EVs.
Then one of the stock’s best-known bulls told his followers to slow down.
On Tuesday, Gary Black, managing partner of The Future Fund and a former Janus Capital CEO, posted on X that “loving a company doesn’t mean you should love the stock.” He gave his reason:
“TSLA FY’26 P/E of 234x vs +45% forward eps growth (5.2x PEG) is rich by any standard.”
A follower asked what weighs most on his caution: valuation, falling estimates, or commoditization. Black answered: “Valuation math.”
When a bear says that, Tesla fans can ignore it. Author Michael Lewis said much the same on The Bulwark Daily this week, noting that Musk’s “companies are trading at hundreds of times earnings.” Black is harder to wave off. He calls Tesla “a great company with a unique opportunity in front of it to transform how we travel.” When another follower asked how much he’d lost shorting the stock, he replied: “We didn’t short $TSLA. We don’t short good companies trading at stretched valuations.”
That’s a direct test of the conservative case for 32% upside that TIKR published on Tuesday.
Checking Black’s math
Black’s 234x is built on this year’s earnings, while TIKR’s forward P/E looks at the next twelve months, which stretch into 2027 when analysts expect higher profits. On that basis, Tesla trades at 205.9x, nearly double its five-year average of 107.2x…
(It’s below the 243.1x peak from last December, but that isn’t saying much.)
Meanwhile, the earnings side of the story has been heading the wrong way. Tesla’s normalized EPS nearly halved, from $3.12 in 2023 to $1.66 in 2025, and the 33 analysts with a 2026 estimate expect only around $1.75 this year:
Black thinks the delivery beat should raise those estimates. Tesla delivered 487,000 vehicles against the 462,000 he says were expected. If that extra volume lasts, he figures it adds $0.15 a share to annual adjusted EPS, about 9% on top of this year’s $1.74.
It still doesn’t close the gap. Consensus has EPS reaching $3.23 in 2028, up 86% from this year. Even then, Black’s 234x multiple would only fall to about 126x at today’s price. That’s still above Tesla’s own five-year average.
Black also noted that over the last five years, Tesla returned 43% while the Nasdaq 100 returned 111%.
Warren Buffett has long said he’d rather pay a fair price for a wonderful company than a wonderful price for a fair one. Black thinks Tesla is the wonderful company, but the price is where he stops short of calling it fair.
But isn’t the beat worth more?
Black raised that objection himself, and on Monday, he wrote that the beat “should be worth roughly $32/share to TSLA stock price,” compared with a $23 gain since Friday morning, “so there may be more near-term upside.”
Fair enough. But by his own model, the stock had already priced in about 72% of the beat by Monday, leaving about $9 a share of room. That’s a short-term trade on the deliveries, and it leaves a 234x multiple where it was.
The bigger objection is that Tesla holders are paying for autonomy and Optimus, and 2026 earnings are beside the point. Black has an answer there too. In 2021 he called Full Self-Driving “more a call option than driver of valuation.” On Tuesday, he reposted that line to argue that FSD mainly helps sell more Teslas. His newer point is about gas prices: “Soaring gas prices are also causing people who never thought about buying an EV to turn to TSLA, Rivian, and other non-legacy branded EVs.”
Gasoline averaged $4.36 a gallon on Wednesday, up from $3.12 a year ago, so that argument holds up. But extra car sales show up as earnings, and earnings are exactly what the multiple has outrun. Optimus is an even bigger bet, and this quarter’s deliveries tell us nothing about it.
The upshot
Tesla’s top bull is calling the stock rich, and TIKR’s numbers back him up. The delivery beat is real, and by Black’s math it’s worth a little more than the stock has already gained. Still, a 9% bump to this year’s earnings doesn’t come close to justifying a 206x forward multiple, so I’d want a lower price or much faster earnings growth before buying here.
Of course, if gas stays above $4 a gallon and the extra volume holds, analysts could raise their estimates faster than they expect to now, which makes Tesla’s next earnings report the first real test.
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!
