Tesla: The Platform Thesis Is Advancing, but the Valuation Has Run Ahead
SELL | $335 target price
Reference price: $403.30 on October 29, 2026 | Implied return: -17.0% | Prior rating: Buy
Summary
Tesla reported Q3 revenue of $28.046 Bn, broadly flat y/y and 1.0% below consensus. Adjusted EPS of $0.48 beat the $0.45 consensus, but operating income fell 56% to $718 Mn.
The platform thesis strengthened through 1.74 Mn paid FSD subscriptions, more than 75% FSD attachment on new North American deliveries, Cybercab rides in Austin, and rapid growth in unsupervised miles. Core automotive demand and near-term energy execution were weaker.
My base case values Tesla at $335 per share. It assumes $3.75 of 2028 EPS, an exceptionally generous 120x multiple, and a 14.65% discount rate. The result is still 17.0% below the latest price.
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