Investors are curious to know how Elon Musk’s automaker fared as it concluded an especially turbulent year. The firm is scheduled to release its fourth-quarter earnings.
The company’s stock fell more than 50% from its December peak through April of last year due to headwinds such as dwindling car sales, worries about tariffs, and Musk’s politics.
Then, as a result of trade agreements and Musk’s announcement that he would leave the US government, shares surged more than 100%.
However, Wall Street is cautious about the difficulties the automaker will face, especially given the ongoing drop in deliveries. For the fourth quarter, the company recorded a 16% year-over-year decline in deliveries.
Forecasters are also keeping an eye on potential obstacles as Tesla intensifies its robotics and AI initiatives. Wall Street projects $25.1 billion in revenue and $0.34 in earnings per share for the quarter.
Here are the reasons why Wall Street is anxious about Tesla’s Q4 Earnings:
According to a note sent to clients by JPMorgan, analysts observed that “Tesla’s stock price has been coherent with the business rapidly declining earning outlook”. The bank has also decreased its earnings per share estimate from $0.48 to $0.43 after missing the delivery target for the fourth quarter.
The analyst team headed by Ryan Brinkman has also noted that “the 4Q25 deliveries were decreased by 16%, which was the worst year-over-year decline for the company. Therefore, the analyst expressed that there is a prominent downside risk for the stock. The analyst further believes that Tesla’s stocks currently overpriced are expected to drop sharply.
Wells Fargo also believes that the company’s core business is wilting as demands is decreased and price cuts are leaving minimal impacts. Currently, the big hopes for the company’s stock price are robotaxis and AI. However, if these novel technologies fail, the Tesla shares could drop sharply.
Oppenheimer highlights that the progress on these technologies is slower in contrast to the expectations due to stalling demand for electric vehicles. Therefore, the slower sales may decrease the company’s revenue and earnings for the coming years. According to analysts, Tesla is rated as a “perform” and has adjusted their Q4 revenue forecast down from $24.08B to $23.7B. In addition, they have also reduced their 2026 fiscal year revenue projection from $97.2B to $2.06 earnings per share.
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Although Tesla’s global sales were not impressive during the previous years, the most recent dip in sales can primarily be attributed to the expiration of the government’s EV Tax Credit, which ended in September.
Analysts at Cantor believe that Tesla can alleviate this situation by offering additional low-cost models and also providing improved autonomous driving capabilities. They also stated that two of the new products, complete autonomous driving capabilities in Europe and China, along with expanding its Robotaxi presence throughout North America and launching the Optimus brand in 2027, will create significant additional value for Tesla shareholders. The firm reaffirmed its “overweight” opinion of Tesla and has set a price target of $510, which provides for an additional 17% gain from the current price of the stock.
Overall, if Tesla’s Q4 earnings are weak as suspected by the analysts, then it indicates the company’s core business has lost its momentum, and the company’s current and future valuation is dependent on the success of AI and robotaxi.
