Tesla Stock (TSLA) Consolidating Higher Ahead of Earnings

Tesla's stock (TSLA) has been consolidating higher ahead of its third-quarter earnings report today, due after the closing bell. The electric vehicle giant's performance is under intense scrutiny, fueled by a surge in deliveries, ambitious technological advancements, and a lingering controversy surrounding CEO Elon Musk's compensation. The stock is currently up 1.93% in the last month, and has added 16.69% since the turn of the year.

Analysts are projecting an earnings per share (EPS) of $0.55 on $26.58 billion in revenue for Q3 2025. This would represent a significant rebound from a relatively soft first half of the year, where profit and revenue declined.

Investment firm Stifel recently raised its price target for Tesla shares to $483, citing growing confidence in the company's progress with self-driving technology and its Robotaxi program. Stifel anticipates unsupervised Full Self-Driving (FSD) availability for personal use in the U.S. by the end of 2025, with a broader ride-hailing rollout potentially reaching half the U.S. population by year-end.

Tesla reported delivering 497,099 vehicles in the third quarter, soundly beating Wall Street's consensus estimate of 454,130. This 7% year-over-year increase highlights Tesla's production prowess and continued strong demand, particularly as consumers rushed to take advantage of federal EV tax credits before their expiration at the end of September. However, the expiration of these credits and the subsequent increase in lease prices across Tesla's U.S. models introduce uncertainty about future demand.

Despite the positive outlook, controversy continues to surround Tesla's proposed $1 trillion compensation package for CEO Elon Musk. Proxy advisor Institutional Shareholder Services (ISS) has recommended shareholders vote against the plan, citing its excessive size and potential dilution of shareholder value.

This marks the second consecutive year ISS has opposed Musk's pay, potentially influencing major institutional backers ahead of the crucial shareholder meeting on November 6. While Tesla's board defends the package as vital to retain Musk's leadership and influence, the controversy adds a layer of complexity to the company's narrative.

While much of the bullish sentiment surrounding Tesla hinges on its advancements in self-driving technology, it is worthwhile to consider the risks. The timeline for full self-driving capabilities has repeatedly been pushed back, and regulatory hurdles remain significant.

Stifel's expectation of widespread Robotaxi deployment by year-end may be overly optimistic, especially considering the complexities of navigating diverse driving conditions and ensuring passenger safety. If Tesla fails to deliver on its self-driving promises, the stock's valuation could face a significant correction. Furthermore, the increased lease pricing following the tax-credit expiration could stifle demand, creating a perfect storm of lowered expectations.

Tesla's upcoming earnings report is a pivotal moment for the company. While strong delivery figures and optimistic analyst forecasts provide a positive backdrop, one must carefully consider the potential headwinds, including demand uncertainty, the CEO compensation controversy, and the broader economic climate. The earnings call will be crucial in shaping market sentiment and determining whether Tesla can sustain its recent momentum.