Tesla's Q1 financial report is hard to be optimistic about, analysts are looking towards 2026
Tesla will release its Q1 2025 financial report on Tuesday. Analysts expect revenue to increase slightly by 2% to $21.5 billion, but earnings per share are projected to decline to $0.42, with vehicle deliveries hitting a two-year low. Despite facing brand damage and high tariffs, analysts remain optimistic about Tesla's long-term prospects, believing that its innovation capabilities and market potential are significant, with a rebound expected in 2026. Analysts have revised their delivery expectations for 2025 down to 1.65 million vehicles
According to Zhitong Finance APP, Tesla (TSLA.US) will release its Q1 2025 financial report after the market closes on Tuesday and hold a highly anticipated conference call. Analysts expect its revenue to increase slightly by 2% year-on-year to around $21.5 billion, but earnings per share are expected to decline from $0.45 in the same period last year to $0.42, a significant drop from $0.73 in the previous quarter.
The decline in profits is mainly due to a sharp drop in vehicle deliveries for the quarter, which fell to 336,681 units, marking the worst quarterly performance in over two years.
Wedbush Securities analyst Dan Ives stated that due to brand damage, if Musk indicates he will stay in DOGE for the long term, Tesla and Musk will face a "red alert" situation.
Ives emphasized that since President Trump returned to the White House and Musk joined the government, Tesla's stock has been impacted by ongoing brand damage, "poor" first-quarter delivery numbers, and high tariffs affecting Tesla's new model plans and supply chain costs.
However, Ives' team remains bullish on Tesla in the long term, believing that the electric vehicle giant ranks alongside NVIDIA as one of the most disruptive tech companies globally, with its innovation, engineering scale, autonomous driving roadmap, and robotics business set to unleash significant valuation potential.
Deepwater Asset Management analysts Gene Munster and Brian Becker also hold a long-term optimistic view, stating that 2026 will be a turning point for Tesla. The firm predicts that deliveries will decline by 9% in 2025 but expects a rebound in 2026, with deliveries increasing by 35%, thanks to brand recovery, a resurgence in electric vehicle demand, and more affordable models.
Munster and Becker wrote, "In the long run, Tesla's investment outlook still depends on its ability to solve the autonomous driving issue and scale its robotics technology."
Currently, analysts have significantly lowered their expectations for Tesla's 2025 delivery numbers from 2 million to 1.65 million, and the company may miss its annual target for the second consecutive year.
However, if the earnings call signals the following, the stock price may receive a boost: Musk's commitment to returning to Tesla's core business, more details on the timeline and specifics for the rollout of Austin's Full Self-Driving (FSD), and the production timeline for new low-cost models.
It is worth noting that the options market is betting that Tesla's stock price will fluctuate by 10% after the earnings report is released