A month has gone by since the last earnings report for Tesla (TSLA). Shares have lost about 1.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Tesla due for a breakout? Well, first let’s take a quick look at its latest earnings report in order to get a better handle on the recent drivers for Tesla, Inc. before we dive into how investors and analysts have reacted as of late.
Tesla Q4 Earnings Beat Estimates
Tesla earnings per share of 50 cents, which beat the Zacks Consensus Estimate of 45 cents but decreased from the year-ago figure of 73 cents. Total revenues of $24.9 billion missed the Zacks Consensus Estimate of $25.14 billion and declined 3% year over year.
Key Takeaways
Tesla’s fourth-quarter production totaled 434,358 units (422,652 Model 3/Y and 11,706 other models), which declined 5% year over year and missed our estimate of 462,212 units. The company delivered 418,227 vehicles, which declined 16% year over year and fell short of our estimate of 448,384 units. The Model 3/Y registered deliveries of 406,585 vehicles, which declined 14% year over year and missed our expectation of 430,871 units.
Total automotive revenues of $17.7 billion declined 11% year over year and missed our estimate of $19.3 billion. The reported figure also included $542 million (from the sale of regulatory credits for electric vehicles), which declined 21.7% year over year. Automotive sales, excluding revenues from leasing and regulatory credits, totaled $16.8 billion, which declined 10.2% and missed our projection of $18.5 billion on lower-than-expected deliveries. Automotive gross profit (excluding automotive leasing and regulatory credits) was $2.9 billion. Automotive gross margin was 17.2%, up from 12.8% reported in the fourth quarter of 2024.
Tesla’s operating margin declined 50 basis points year over year to 5.7% in the quarter under review, but topped our estimate of 5.3%.
Energy Generation and Storage revenues amounted to $3.84 billion, which rose 25% year over year and beat our estimate of $3.4 billion. Notably, energy storage deployments totaled 14.2 GWh. Services and Other revenues amounted to $3.4 billion, up 18% year over year. The figure matched our estimate. Tesla ended fourth-quarter 2025 with 77,682 Supercharger connectors.
Financials
Tesla had cash/cash equivalents/investments of $44.1 billion as of Dec. 31, 2025, compared with $36.6 billion as of Dec. 31, 2024. Long-term debt and finance leases, net of the current portion, totaled $6.74 billion, up from $5.75 billion as of Dec. 31, 2024.
Net cash provided by operating activities amounted to $3.81 billion in fourth-quarter 2025, down from $4.81 billion in the year-ago period. Capital expenditure totaled $2.39 billion. Tesla generated free cash flow of $1.42 billion during the reported quarter compared with $2.03 billion in the fourth quarter of 2024.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -16.88% due to these changes.
VGM Scores
At this time, Tesla has a average Growth Score of C, a score with the same score on the momentum front. However, the stock was allocated a score of F on the value side, putting it in the lowest quintile for value investors.
Overall, the stock has an aggregate VGM Score of F. If you aren’t focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It’s no surprise Tesla has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
Tesla belongs to the Zacks Automotive – Domestic industry. Another stock from the same industry, Paccar (PCAR), has gained 0.6% over the past month. More than a month has passed since the company reported results for the quarter ended December 2025.
Paccar reported revenues of $6.25 billion in the last reported quarter, representing a year-over-year change of -15.1%. EPS of $1.06 for the same period compares with $1.66 a year ago.
Paccar is expected to post earnings of $1.13 per share for the current quarter, representing a year-over-year change of -22.6%. Over the last 30 days, the Zacks Consensus Estimate has changed -16.1%.
Paccar has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
Zacks’ Research Chief Names “Stock Most Likely to Double”
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company’s customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Hims & Hers Health, which shot up +209%.
Free: See Our Top Stock And 4 Runners Up
Tesla, Inc. (TSLA) : Free Stock Analysis Report
PACCAR Inc. (PCAR) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
