Tesla's Q3 Earnings Divide Analysts, But Dan Ives Says 'The Worst Is In The Rearview Mirror' For The 'Most Undervalued' Name In AI
Tesla's Q3 earnings report has elicited mixed reactions from analysts. While some view it as a turning point, others remain cautious. Gene Munster highlighted Tesla's strong balance sheet, with cash increasing by $4 billion to $41 billion. Dan Ives expressed optimism, stating the worst is behind Tesla and predicting significant growth in the autonomous market. Conversely, Bryn Talkington advised waiting for a better entry point, noting the stock's current price of $438.97. Tesla reported $28.09 billion in revenue but missed earnings expectations, leading to a slight decline in stock price.
Tesla Inc.'s (NASDAQ:TSLA) third-quarter results have sparked a range of reactions from Wall Street, with some analysts calling the report a turning point and others urging caution on near-term expectations.
Strong Balance Sheet To ‘Fund The Product Roadmap’
On Wednesday, in a post on X, Gene Munster, the managing partner at Deepwater Asset Management, highlighted Tesla’s balance sheet strength, noting that its cash and liquidity has increased by $4 billion during the quarter to $41 billion, which he said was enough to fund the company’s “product roadmap.”
“The dream can be funded,” Munster said, adding that the company’s competitors General Motors Co. (NYSE:GM) and Ford Motor Co. (NYSE:F) have about $23 billion each.
Munster also noted that the company’s Cybercab is “on schedule for volume production in 2026,” while its Optimus humanoid robot “is still early.”
The Worst ‘Is In The Rearview Mirror’
Wedbush analyst Dan Ives was upbeat about the company’s third-quarter results, saying that “the worst is in the rearview mirror,” while appearing on CNBC’s “Closing Bell.”
Ives said that Tesla has entered what he called its “most important chapter of growth ever, the autonomous and robotics future.” He called this the company’s “golden chapter.”
He described Tesla as a “physical AI play,” comparing it with NVIDIA Corp. (NASDAQ:NVDA), and said that “Tesla continues to be the most undervalued AI name.” He also said that the company would own 80% of the global autonomous market, while projecting a market capitalization of “$3 trillion by the end of next year.”
Given its current market capitalization of $1.38 trillion, Ives essentially expects the stock to more than double over the next 12 to 15 months.
Stock Unlikely To Break Out During ‘This Quarter’
Fund manager Bryn Talkington, the managing partner at Requisite Capital Management, took a more measured approach to the stock while appearing on CNBC’s “Closing Bell” alongside Ives.
She said that she would add to her position in the company “around $390,” 11% below where the stock currently trades at $438.97, while adding that she doesn’t “see this quarter being the quarter that it breaks out.”
Talkington, however, praised the company’s advances in autonomous technology, highlighting its safety standards while noting that “using the autopilot, there was one crash every 6.3 million miles,” as opposed to regular cars, which she said experience a crash every 700,000 miles. “So, that’s incredible,” she said.
Tesla Dips After Q3 Results
Tesla released its third-quarter earnings on Wednesday after the markets closed, reporting $28.09 billion in revenue, up 12% year-over-year and ahead of consensus estimates at $26.23 billion.
Earnings during the quarter were $0.50 per share, which, however, missed the Street’s estimate of $0.54 per share, marking its fourth consecutive miss.
Tesla shares were down 0.82% on Wednesday, closing at $438.97, and are down 3.05% overnight following its earnings announcement.
