Tesla's Q3 Earnings Disappoint Despite Revenue Beat, Wall Street Divided

Tesla (NASDAQ: TSLA) posted third-quarter results that didn't quite hit the mark on profits, though revenue was stronger than many anticipated. Adjusted earnings per share came in at 50 cents, missing the 54-cent consensus from analysts, while top-line revenue clocked in at $28.1 billion, surpassing the expected $26.37 billion. Automotive revenue alone rose 6% year-over-year to $21.2 billion, bolstered by a rush of buyers eager to take advantage of disappearing federal EV tax credits.

Shares slipped 3% on the news as the street digests what the numbers mean for Tesla's near-term outlook. The expiration of those tax incentives, combined with rising tariff costs, leaves many questioning how sustainably strong demand will be moving forward. The looming question now: can Tesla maintain momentum without the tailwind of government subsidies?

Analysts were quick to share their takes, reflecting a spectrum of views. On the bearish side, Wells Fargo's Colin Langan handed down an underweight rating with a price target that suggests a massive 73% drop from the current price, citing a deteriorating core business and skepticism over the timeline for Tesla's ambitious Robotaxi and Optimus projects.

UBS wasn't much more optimistic, slapping on a sell rating and trimming its target to $247, about 44% below Tesla's recent close. Their takeaway? Tesla's near-term story remains wrapped up in its traditional auto and energy segments, while the AI and autonomous ambitions-though exciting-are likely priced into the stratosphere already.

Jefferies held a more neutral stance, with a $300 target implying a 32% downside. They highlighted a slight EBIT miss influenced by one-off charges but acknowledged Tesla's healthy free cash flow, driven partly by a working capital inflow and consistent capital expenditures. According to Jefferies, the current auto segment isn't what's driving valuation these days but it keeps cash flowing to fund future tech bets.

Barclays echoed this balanced view, framing Tesla as moving past its auto roots toward AI growth, which many investors find intriguing. Their equal weight rating and $350 target reflect a belief that while vehicle sales may stall, Tesla's future lies elsewhere-specifically in autonomy and robotics.

Goldman Sachs and Deutsche Bank both stayed on the cautious optimistic side. Goldman's neutral rating and $400 target point to a more tempered expectation for growth in autonomy and robotics profits. Deutsche Bank raised its price target to $440, nearly flat versus the current price, betting on gradual progress in Tesla's humanoid and robotaxi projects, with particular eyes on Tesla's Full Self-Driving (FSD) version 14 rollout.

Meanwhile, Morgan Stanley's Adam Jonas, a long-time Tesla bull, irons out the narrative a bit. He suggests Tesla is gracefully stepping back from traditional cars while keeping a steady free cash flow profile. His $410 target dips slightly below current levels but underscores confidence in Tesla's ability to capture value in autonomous driving, despite stiff competition.

The big takeaway: Tesla is amid a tricky transition. Traditional car profits aren't enough to wow Wall Street anymore. The real excitement-and uncertainty-lies in whether Tesla's AI and robotics ventures can deliver on their sky-high promises. And with various analysts giving price targets anywhere from $120 to $440, it's clear the market remains divided on the EV giant's roadmap. Whether Tesla can 'steal the fire' in autonomy and redefine transportation again remains the question worth watching.