RIVN

Rivian Automotive (RIVN) is expected to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended September 2026. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price. The earnings report, which is expected to be released on October 29, might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower. While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it's worth handicapping the probability of a positive EPS surprise. This a manufacturer of motor vehicles and passenger cars is expected to post quarterly loss of $0.67 per share in its upcoming report, which represents a year-over-year change of +4.3%. Revenues are expected to be $2.02 billion, up 29.7% from the year-ago quarter. The consensus EPS estimate for the quarter has been revised 1.03% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period. Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change. Price, Consensus and EPS Surprise Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. This insight is at the core of our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction). The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only. A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP. Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell). For Rivian Automotive, the Most Accurate Estimate is lower than the Zacks Consensus Estimate, suggesting that analysts have recently become bearish on the company's earnings prospects. This has resulted in an Earnings ESP of -2.55%. On the other hand, the stock currently carries a Zacks Rank of #2. So, this combination makes it difficult to conclusively predict that Rivian Automotive will beat the consensus EPS estimate. While calculating estimates for a company's future earnings, analysts often consider to what extent it has been able to match past consensus estimates. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number. For the last reported quarter, it was expected that Rivian Automotive would post a loss of$0.65 per share when it actually produced a loss of -$0.47, delivering a surprise of +27.69%. Over the last four quarters, the company has beaten consensus EPS estimates four times. An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss. That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. Rivian Automotive doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release. Rivian Automotive (RIVN), another stock in the Zacks Automotive - Domestic industry, is expected to report loss per share of $0.67 for the quarter ended September 2026. This estimate points to a year-over-year change of +4.3%. Revenues for the quarter are expected to be $2.02 billion, up 29.7% from the year-ago quarter. Over the last 30 days, the consensus EPS estimate for Rivian Automotive has been revised 1% up to the current level. Nevertheless, the company now has an Earnings ESP of -2.55%, reflecting a lower Most Accurate Estimate. This Earnings ESP, combined with its Zacks Rank #2 (Buy), makes it difficult to conclusively predict that Rivian Automotive will beat the consensus EPS estimate. The company beat consensus EPS estimates in each of the trailing four quarters. Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Rivian Automotive, Inc. (RIVN) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Tesla (TSLA) came out with quarterly earnings of $0.48 per share, beating the Zacks Consensus Estimate of $0.45 per share. This compares to earnings of $0.5 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +6.67%. A quarter ago, it was expected that this electric car maker would post earnings of $0.5 per share when it actually produced earnings of $0.33, delivering a surprise of -34%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Tesla, which belongs to the Zacks Automotive - Domestic industry, posted revenues of $28.05 billion for the quarter ended September 2026, surpassing the Zacks Consensus Estimate by 0.96%. This compares to year-ago revenues of $28.1 billion. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Tesla shares have lost about 16.9% since the beginning of the year versus the S&P 500's gain of 12.7%. While Tesla has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Tesla was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.50 on $28.31 billion in revenues for the coming quarter and $1.69 on $106.09 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Automotive - Domestic is currently in the bottom 16% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Rivian Automotive (RIVN), another stock in the same industry, has yet to report results for the quarter ended September 2026. The results are expected to be released on October 29. This a manufacturer of motor vehicles and passenger cars is expected to post quarterly loss of $0.67 per share in its upcoming report, which represents a year-over-year change of +4.3%. The consensus EPS estimate for the quarter has been revised 1% higher over the last 30 days to the current level. Rivian Automotive's revenues are expected to be $2.02 billion, up 29.7% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Tesla, Inc. (TSLA) : Free Stock Analysis Report Rivian Automotive, Inc. (RIVN) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Genuine Parts Company GPC reported third-quarter 2026 adjusted earnings of $2.07 per share, missing the Zacks Consensus Estimate of $2.09. The bottom line increased 4.5% from $1.98 in the year-ago quarter. Revenues rose 4.2% year over year to $6.52 billion and surpassed the consensus estimate of $6.5 billion. Comparable sales increased 2.9%, led by strong Industrial demand. Acquisitions and favorable currency movements also supported growth, while North America Automotive faced margin pressure. Genuine Parts Company price-consensus-eps-surprise-chart | Genuine Parts Company Quote The revenue increase included a 0.9% contribution from acquisitions and a combined 0.4% favorable impact from foreign currency and other factors. Growth was recorded across North America Automotive, International Automotive and Industrial operations. Adjusted gross margin expanded 70 basis points to 38.1%. However, adjusted selling, administrative and other expenses represented 29.5% of sales, up from 28.8% a year earlier, partly offsetting the gross-margin improvement. Industrial sales advanced 6.1% year over year to $2.41 billion. Comparable sales climbed 5.5%, while favorable currency movements added 0.5% and acquisitions contributed 0.1%. The segment generated EBITDA of $317 million, up 11.2% from the prior-year period. EBITDA margin expanded 60 basis points to 13.2%. Growth was recorded in 12 of 14 end markets, while eight markets improved sequentially. Maintenance, repair and operations sales grew approximately 5%, supported by large corporate accounts. Value-added solutions sales increased nearly 10%, improving sequentially from the second quarter. North America Automotive sales rose 2.2% to $2.54 billion, driven by a 1.7% comparable-sales gain and a 1.1% contribution from acquisition. Foreign currency and other factors had a combined 0.6% unfavorable impact. Segment EBITDA declined 2.9% to $194 million, while EBITDA margin contracted 40 basis points to 7.6%. Company-owned stores in the United States delivered comparable-sales growth of approximately 3.5%, including roughly 5% growth in the commercial business. The Benson acquisition continued to perform ahead of financial and operational expectations. International Automotive revenues rose 4.5% to $1.57 billion. Foreign currency and acquisitions each contributed 1.7%, while comparable sales increased 1.1%. Segment EBITDA improved 4.7% to $141 million, with margin remaining flat at 9%. Europe recorded sequential improvement in comparable sales, particularly in the United Kingdom. Australasia delivered positive sales growth despite a challenging operating environment. Local-currency sales increased 3.6% in Europe and 1.7% in Australasia. GAAP net income declined to $224 million from $226 million a year earlier, while diluted earnings remained flat at $1.62 per share. Adjusted net income increased to $286 million from $276 million. The difference between GAAP and adjusted results reflected approximately $61 million of after-tax adjustments. Restructuring and other costs totaled $64.5 million before taxes, while separation expenses reached $21.2 million. Adjusted EBITDA increased 4.2% to $549 million, with margin unchanged at 8.4%. GPC remains on track to separate its Automotive and Industrial businesses into two publicly traded companies in the first quarter of 2027. GPC lowered the upper end of its 2026 adjusted earnings guidance to $7.75 per share from $8, retaining the lower end at $7.5. The company reduced its GAAP earnings forecast to $5.6-$5.85 per share from $5.9-$6.4. Total sales growth guidance remains at 3-5.5%. North America Automotive growth is projected at 2.5-4.5%, International Automotive at 5-8% and Industrial at 3-6%. The company maintained its adjusted EBITDA outlook of $2-$2.2 billion. Cash from operations totaled $817 million in the first nine months of 2026, up from $511 million a year earlier. Free cash flow reached $502 million compared with $160 million in the prior-year period. Genuine Parts ended September with $2.4 billion of liquidity, including $763 million in cash. Year-to-date capital expenditures were $314 million, acquisition spending totaled $69 million and cash dividends reached $434 million. The company continues to expect full-year operating cash flow of $1-$1.2 billion and free cash flow of $550-$700 million. GPC currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the Auto-Tires-Trucks space are Rivian Automotive, Inc. RIVN, Fox Factory Holding Corp. FOXF and Lucid Group, Inc. LCID. RIVN is expected to report third-quarter fiscal 2026 results on Oct. 29. The Zacks Consensus Estimate for loss is pegged at 67 cents per share. RIVN currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. FOXF is expected to report third-quarter fiscal 2026 results on Nov. 5. The Zacks Consensus Estimate for loss is pegged at 48 cents per share. FOXF currently sports a Zacks Rank #1. LCID is expected to report third-quarter 2026 results on Nov. 9. The Zacks Consensus Estimate for loss is pegged at $2.78 per share. LCID currently carries a Zacks Rank #2. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Genuine Parts Company (GPC) : Free Stock Analysis Report Fox Factory Holding Corp. (FOXF) : Free Stock Analysis Report Lucid Group, Inc. (LCID) : Free Stock Analysis Report Rivian Automotive, Inc. (RIVN) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

General Motors GM reported third-quarter 2026 adjusted earnings of $3.7 per share, up 32.2% year over year. The figure surpassed the Zacks Consensus Estimate of $3.55. Higher wholesale volumes, favorable vehicle mix and cost efficiencies supported the outperformance. Revenues increased 2.9% to $50.02 billion and beat the consensus estimate of $48.21 billion. Global wholesale volume rose to 1.03 million vehicles from 976,000 a year earlier. Adjusted earnings before interest and taxes (EBIT) increased 21.6% to $4.11 billion, while adjusted EBIT margin expanded 130 basis points to 8.2%. General Motors Company price-consensus-eps-surprise-chart | General Motors Company Quote GM North America generated revenues of $41.42 billion, up 2.1% from the prior-year quarter. Wholesale volume increased to 870,000 vehicles from 840,000, supported by higher internal combustion engine (ICE) shipments. ICE volume increased by 53,000 units, partly offset by a 23,000-unit decline in electric vehicle volume. The segment's adjusted EBIT surged 43.4% to $3.59 billion. Adjusted EBIT margin expanded 250 basis points to 8.7%. Lower warranty costs, favorable EV inventory adjustments and improved vehicle mix supported profitability. Higher commodity, logistics and manufacturing costs partly offset these benefits. U.S. dealer inventory ended the quarter at 568,000 vehicles compared with 527,000 a year earlier. The company maintained pricing discipline, with incentives averaging 4.8% of manufacturer's suggested retail price, below the industry average of 6.6%. GM International revenues increased 12.1% year over year to $4.09 billion. Wholesale volume climbed to 159,000 vehicles from 137,000, supported by higher shipments in South America. However, adjusted EBIT declined 87.6% to $28 million. Higher manufacturing and logistics expenses, alongside a negative mark-to-market adjustment related to GM's investment in Momenta, weighed on profitability. Higher volumes and favorable foreign exchange movements provided partial relief. GM's China joint ventures generated equity income of $32 million, down 60% year over year. Nevertheless, the China business delivered its eighth consecutive profitable quarter, supported by restructuring efforts and strong new-energy vehicle sales. GM Financial revenues declined marginally to $4.31 billion from $4.34 billion in the year-ago quarter. Ending earning assets increased to $126.9 billion from $126.5 billion. Adjusted earnings before taxes declined 16.9% to $668 million. Lower interest expenses and higher retail yields were offset by increased provisions for loan losses and higher lease depreciation expenses. The financing arm paid a $250 million dividend to GM during the quarter, bringing year-to-date dividends to $1.2 billion. OnStar ended the quarter with deferred revenues of $6.8 billion, up approximately 40% year over year. Recognized revenues exceeded $800 million, increasing 15%. The company remained on track to add approximately 1 million subscribers in 2026, approaching 13 million by year-end. Super Cruise recognized revenues increased approximately 60%. GM delivered around 83,000 Super Cruise-equipped vehicles during the quarter, bringing year-to-date sales above 243,000 units. Management expects to exceed 850,000 subscribers by year-end, with the post-three-year prepaid subscription attach rate remaining between 30% and 40%. Automotive operating cash flow increased 32.6% to $8.05 billion. Adjusted automotive free cash flow jumped 40% to $5.88 billion, driven by higher automotive earnings and tariff-related timing benefits. Capital expenditures totaled $2.33 billion for automotive operations. GM repurchased $2.5 billion of shares, retiring approximately 29 million shares, and distributed $200 million in dividends. Automotive cash and marketable securities totaled $23.1 billion, while total automotive liquidity reached $37.1 billion. The board also authorized a new $20 billion multi-year share repurchase program. General Motors narrowed its full-year adjusted EBIT guidance to $14.5-$15.5 billion from $14-$16 billion. Adjusted earnings are now projected at $12.75-$13.75 per share, compared with the previous range of $12-$14. The company raised its adjusted automotive free cash flow forecast to $11.5-$12.5 billion from $9.5-$11.5 billion. It maintained expectations for an 8-10% adjusted EBIT margin in North America and capital spending, including battery joint-venture investments, of $10-$12 billion. Management expects warranty savings toward the upper end of $1-$1.5 billion, while commodity inflation, including logistics and memory-chip costs, is projected at approximately $2 billion. Gross tariff costs are expected near the lower end of the $2.5-$3.5 billion range. The board declared a quarterly dividend of 18 cents per share, payable Dec. 17, 2026, to shareholders of record as of Dec. 4. GM currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the Auto-Tires-Trucks space are Rivian Automotive, Inc. RIVN, Fox Factory Holding Corp. FOXF and Lucid Group, Inc. LCID. RIVN is expected to report third-quarter fiscal 2026 results on Oct. 29. The Zacks Consensus Estimate for loss is pegged at 67 cents per share. RIVN currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. FOXF is expected to report third-quarter fiscal 2026 results on Nov. 5. The Zacks Consensus Estimate for loss is pegged at 48 cents per share. FOXF currently carries a Zacks Rank #1. LCID is expected to report third-quarter 2026 results on Nov. 9. The Zacks Consensus Estimate for loss is pegged at $2.78 per share. LCID currently carries a Zacks Rank #2. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report General Motors Company (GM) : Free Stock Analysis Report Fox Factory Holding Corp. (FOXF) : Free Stock Analysis Report Lucid Group, Inc. (LCID) : Free Stock Analysis Report Rivian Automotive, Inc. (RIVN) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Tesla TSLA is slated to release third-quarter 2026 results on Wednesday, after market close. The Zacks Consensus Estimate for the to-be-reported quarter's earnings and revenues is pegged at 44 cents per share and $27.8 billion, respectively. The earnings estimate for the to-be-reported quarter has been revised upward by a cent over the past seven days. The bottom-line projection indicates a year-over-year decline of 12%. The Zacks Consensus Estimate for quarterly revenues suggests a year-over-year contraction of 1.1%. Image Source: Zacks Investment Research For full-year 2026, the Zacks Consensus Estimate for TSLA's revenues is pegged at $106 billion, implying a rise of 11.9% year over year. The consensus mark for 2026 EPS is pegged at $1.69, suggesting an uptick of around 2% on a year-over-year basis. In the trailing four quarters, this electric vehicle (EV) and technology giant topped EPS estimates on two occasions for as many misses, with the average negative earnings surprise being 3.67%. Image Source: Zacks Investment Research Our proprietary model does not predict an earnings beat for Tesla this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That's not the case here. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter. TSLA has an Earnings ESP of -10.98% and a Zacks Rank #4 (Sell). You can see the complete list of today's Zacks #1 Rank stocks here. Tesla delivered 486,532 vehicles (comprising 478,237 units of Model 3/Y and 8,295 Other models) in the third quarter of 2026, up 1.3% sequentially. It was Tesla's strongest quarter for EV sales since the third quarter of 2025, when U.S. buyers rushed to purchase before federal EV tax credits expired, prompting the automaker to see a temporary surge in demand. However, the deliveries missed our model estimate of 494,446 units and also declined 2.1% on a year-over-year basis. Tesla's smaller pure-play EV peers—Rivian Automotive RIVN and Lucid Group LCID—came up with contrasting third-quarter delivery reports. While Rivian delivered 19,248 vehicles, topping estimates and rising 45.8% year over year, Lucid fell short of expectations, delivering just 3,806 vehicles, down 6.6%. Coming back to Tesla, we expect automotive sales of roughly $20 billion, indicating a contraction of 1.6%. Our estimate for the company's energy business revenues is pegged at $3.7 billion, suggesting an increase of 10%. However, we expect Tesla's total operating income to decline more than 68% due to higher cost of revenues, R&D and SG&A expenses. Spending related to AI, Cybercab, Optimus and Tesla Semi is likely to have impacted operating results and pressured free cash flow. In the second quarter of 2026, the company's free cash flow turned negative to $1.09 billion, and with capex on the rise, third-quarter FCF is also expected to have remained negative. Year to date, shares of Tesla have plunged 21%, underperforming the sector. Tesla stock is quite overvalued. Going by its price/sales ratio, the company is trading at a forward sales multiple of 12.09, way higher than the sector as well as its own five-year average. Image Source: Zacks Investment Research Tesla's vehicle demand is stabilizing, and energy storage deployments are rising, but those gains are not translating into profits. Margins are on the decline, and heavy capex needs are becoming a major sticking point. Management now expects 2026 capex to exceed $25 billion and spending to grow for the next two to three years. This front-loaded investment is likely to keep the cash generation weak before newer businesses, including AI, AVs and robotics, contribute enough profit to offset the cost of scaling them. Investors are mostly paying for its bets on AI-driven autonomy and the Optimus humanoid robot, which Musk has framed as the company's next growth chapters. But the gap between promise and progress is huge. Tesla's robotaxi network had covered roughly 380,000 driverless miles, according to its second-quarter earnings release. Close peer Waymo has passed 220 million rider-only miles. Optimus is still at an early stage, and the company expects ramp-up will be gradual because many parts and supply chains are new. These bets offer genuine long-term potential, but they must eventually produce meaningful financial returns to justify the cost. Until then, execution and valuation risks remain concerning. As such, investors are better off staying away from the stock now. And if they are sitting on profits, it might be time to book the gains ahead of the third-quarter earnings release. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Tesla, Inc. (TSLA) : Free Stock Analysis Report Lucid Group, Inc. (LCID) : Free Stock Analysis Report Rivian Automotive, Inc. (RIVN) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Tesla (NASDAQ:TSLA), a global EV and energy storage manufacturer, closed at $354.72, down 2.13%. Tesla fell after its Roadster reveal, and investors turned their attention to next week's earnings. Trading volume reached 61.6M shares, coming in about 64% above its three-month average of 37.5M shares. Tesla IPO'd in 2010 and has grown 22,209% since going public. S&P 500 (SNPINDEX:^GSPC) closed at 7,661, down 1.07%, while the Nasdaq Composite (NASDAQINDEX:^IXIC) ended at 26,140, down 2.15%. Among electric vehicle and energy generation/storage manufacturing peers, Rivian Automotive (NASDAQ:RIVN) closed at $12.42, down 4.61%, and Lucid Group (NASDAQ:LCID) closed at $3.13, down 10.57%, underscoring weaker trading across EV names. As interesting as Tesla's Roadster reveal may have been (if you haven't seen it yet, you should look it up), most analysts seemed to agree with investor Gene Munster's consensus that it was an "engineering flex" more than any type of breakthrough for the stock itself. Whether you agree with that notion or not, the reveal did help respark SpaceX (NASDAQ:SPCX) and Tesla merger rumors, as the Roadster was built using SpaceX thrusters, highlighting the vertical integration possible if the companies operated under the same roof. Prediction markets saw the odds of a deal between the two companies nearly double overnight to 56%, as the M&A narrative continues to gain steam. To me, SpaceX is the more interesting stand-alone company, but a combined company with leading businesses in space operations, robotics, AI, and autonomous fleets would bring a level of optionality in next-gen industries matched by only a few peers, if any. Most investors think they missed the AI boat because they didn't buy Nvidia in 2005. But according to our analysts, we're only at the end of "Act 1"—the R&D phase. "Act 2" is the global rollout, a massive technology build-out that Google's CEO says could be more profound than fire or electricity. While everyone watches the chip designers, one "backbone" company provides the critical technology that Nvidia and AMD literally cannot function without. We've detailed this under-the-radar player in our new AI Playbook. Continue » Josh Kohn-Lindquist has positions in Space Exploration Technologies and Tesla. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy. Stock Market Today, Oct. 16: Tesla Slips 2% as Roadster Reveal Fades Before Earnings was originally published by The Motley Fool

The third-quarter earnings season for the Auto-Tires-Trucks sector kicks off on Oct. 20. Despite rising affordability pressures, the U.S. auto market has remained relatively resilient, supported by fleet purchases and demand from higher-income buyers. Easier access to credit has also helped cushion the impact of persistent inflation and weak consumer confidence. Per the Earnings Outlook report dated Oct. 14, the auto sector's earnings and revenues for third-quarter 2026 are expected to grow 3.4% and 0.6%, respectively, on a year-over-year basis. We have identified — with the help of the Zacks Stock Screener — a few auto players that are set to outshine the Zacks Consensus Estimate this earnings season. These include General Motors GM, PACCAR PCAR, Ford F and Rivian Automotive RIVN. Before we discuss the companies, let's take a look at the factors shaping the quarterly performance. The U.S. auto market continued to show resilience despite affordability pressures. New-vehicle sales declined 0.7% year over year to roughly 4.12 million units in the third quarter, per Cox Automotive. For the first nine months of 2026, sales fell about 2% to 12.06 million units. High fuel prices, persistent inflation and rising living costs have been weighing on household budgets, yet demand has held up better than expected. However, the strength is not evenly distributed. Kelley Blue Book reported that the average transaction price of a new vehicle rose for the fourth consecutive month in September to $50,562, approaching the record of $50,614 set in December 2025. This price environment is increasingly pushing budget-conscious buyers out of the new-car market, while wealthier consumers continue to support sales. Greater access to credit is also helping sustain demand. Fleet purchases are providing another important source of support. They accounted for 20% of U.S. vehicle sales during the first nine months, with government and rental purchases increasing 7%. In contrast, retail sales to individual consumers declined 5%, highlighting the growing importance of fleet demand in offsetting weakness in the consumer market. Electric vehicles (EVs) have also held up better than expected. U.S. EV sales reached 262,649 units in the third quarter, up 6.1% sequentially and marking their strongest quarterly showing since the third quarter of 2025. However, sales remained 39.5% below the year-ago level, but that's a tough comparison period when buyers rushed to purchase EVs ahead of the expiration of federal incentives. While it is not possible to be sure about which companies are well-positioned to beat earnings estimates, our proprietary methodology — Earnings ESP — makes it relatively simple. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. Earnings ESP shows the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate. You can see the complete list of today's Zacks #1 Rank stocks here. Our research shows that for stocks with the abovementioned combination, the chances of an earnings beat are as high as 70%. General Motors: The company has an Earnings ESP of +1.22% and a Zacks Rank #3. The company is scheduled to release third-quarter results on Oct. 20. The Zacks Consensus Estimate for General Motors' to-be-reported quarter's earnings and revenues is pegged at $3.52 per share and $48.24 billion, respectively. EPS estimates for the third quarter have moved up by 2 cents in the past seven days. General Motors surpassed earnings estimates in each of the trailing four quarters. General Motors Company price-eps-surprise | General Motors Company Quote GM's vehicle deliveries declined in both key markets in the third quarter of 2026, falling 5.5% year over year to 670,974 units in the United States and 10% to 358,000 units in China. The slowdown could weigh on revenues, although expanding software and digital services may provide some cushion. GM's disciplined pricing strategy is another potential support for profitability. By keeping incentives below the industry average for more than three years, the automaker has avoided aggressive discounting, helping protect margins amid tariff-related costs and inflation. Reflecting this resilience, the Zacks Consensus Estimate for GM North America's operating income stands at $3.28 billion, up from $2.5 billion in the year-ago quarter. PACCAR: The company has an Earnings ESP of +1.04% and a Zacks Rank #3. The company is scheduled to release third-quarter results on Oct. 27. The Zacks Consensus Estimate for PACCAR's to-be-reported quarter's earnings and revenues (truck, parts and other) is pegged at $1.61 per share and $7.56 billion, respectively. EPS estimates for the third quarter have moved up by a cent in the past 60 days. PACCAR surpassed earnings estimates in two of the trailing four quarters and matched on the other occasions. PACCAR Inc. price-eps-surprise | PACCAR Inc. Quote Higher truck deliveries are likely to boost PACCAR's results. The company expects to deliver approximately 42,000 trucks in the to-be-reported quarter, implying an uptick of roughly 8% sequentially and 31% on a yearly basis. PACCAR Parts unit is also expected to boost revenues. Additionally, efficient manufacturing and disciplined cost management, PACCAR expects the margin to reach about 14.5% in the third quarter, up from 14.4% in the second quarter of 2025 and 12.5% in the year-ago period. The Zacks Consensus Estimate for PACCAR's Trucks and Parts pretax profit is pegged at $317 million and $468 million, implying year-over-year growth of 209% and 14%, respectively. Ford: The company has an Earnings ESP of +6.56% and a Zacks Rank #3. The company is scheduled to release third-quarter results on Oct. 28. The Zacks Consensus Estimate for Ford's to-be-reported quarter's earnings and automotive revenues is pegged at 39 cents per share and $45.7 billion, respectively. EPS estimates for the third quarter have moved down by 2 cents in the past seven days. Ford surpassed earnings estimates in three of the trailing four quarters, and missed once. Ford Motor Company price-eps-surprise | Ford Motor Company Quote Ford's focus on higher-margin vehicles is likely to have supported its performance ahead of earnings. The company's U.S. sales fell 6.6% year over year to 509,764 vehicles in the third quarter of 2026, largely due to the planned phase-out of the Escape and Corsair. However, demand for large SUVs, including the Explorer and Expedition, along with sales of the F-Series, Maverick and Super Duty trucks, is expected to have supported revenues and product mix. Ford is prioritizing trucks, large SUVs, off-road models and premium trims to protect pricing and profitability. Reflecting confidence in this strategy, management raised its 2026 Ford Blue EBIT guidance to $5-$5.5 billion from $4.5-$5 billion, anticipating a favorable product mix through the year. Rivian: The company has an Earnings ESP of +7.38% and a Zacks Rank #3. The company is scheduled to release third-quarter results on Oct. 29. The Zacks Consensus Estimate for Rivian's to-be-reported quarter's loss per share and revenues is pegged at 66 cents per share and $1.97 billion, respectively. Loss estimates for the third quarter have narrowed by one cent in the past seven days. Rivian incurred a lower-than-expected loss in each of the trailing four quarters. Rivian Automotive, Inc. price-eps-surprise | Rivian Automotive, Inc. Quote Rivian's third-quarter 2026 deliveries rose 45.8% year over year and 58% sequentially to 19,248 vehicles, exceeding the Zacks Consensus Estimate of 17,792 units. The launch of the more affordable R2 SUV, which began reaching customers in June, is likely to have fueled this growth by expanding Rivian's reach beyond its premium R1S and R1T models. The lower-priced offering is particularly important amid the expiration of federal EV tax credits, tariff pressures and subdued industry demand. Growth in software and services is another potential tailwind, with the Zacks Consensus Estimate for this segment's revenues at $622 million, up from $515 million in the second quarter and $416 million a year earlier. However, the R2 production ramp is expected to weigh on automotive gross profit again in the third quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Ford Motor Company (F) : Free Stock Analysis Report PACCAR Inc. (PCAR) : Free Stock Analysis Report General Motors Company (GM) : Free Stock Analysis Report Rivian Automotive, Inc. (RIVN) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Tesla TSLA is slated to release third-quarter 2026 results on Oct. 21, after the closing bell. The company's automotive business remains a key focus as vehicle deliveries show mixed trends, with year-over-year declines despite a sequential increase. Tesla's ability to sustain vehicle demand, manage costs and improve profitability will be important factors. TSLA missed earnings estimates in two of the trailing four quarters, with the average negative surprise being 3.7%. Tesla, Inc. price-consensus-eps-surprise-chart | Tesla, Inc. Quote Tesla's second-quarter production totaled 451,758 vehicles (442,936 Model 3/Y and 8,822 other models), up 10% year over year. The company delivered 480,126 vehicles worldwide, up 25% from 384,122 units in the year-ago quarter, setting a record for second-quarter deliveries. Model 3/Y deliveries rose 25% year over year to 467,762 units, while deliveries of other models increased 19% to 12,364 units. Total automotive revenues of $20.5 billion rose 23% year over year. Automotive sales, excluding revenues from leasing and regulatory credits, totaled $20 billion, while automotive regulatory credit revenue declined to $146 million from $439 million in the year-ago quarter. Automotive gross margin excluding regulatory credits was 16.3% compared with 15% a year earlier and 19.2% in the preceding quarter. Tesla's third-quarter delivery report provides an early indication of automotive demand ahead of its earnings release. The company delivered 486,532 vehicles in the third quarter, up from 480,126 in the second quarter, but down 2.1% year over year. Model 3/Y deliveries reached 478,237 units, while deliveries of other models totaled 8,295. Production was 464,391 vehicles, below deliveries for the quarter. Tesla cautioned that vehicle deliveries alone do not determine quarterly financial results, which also depend on average selling prices, cost of sales, foreign-exchange movements and other factors. In its second-quarter 2026 update, the company said it remains focused on maximizing factory capacity utilization and growing vehicle sales through a differentiated product portfolio. Tesla also plans to optimize existing production capacity before building new factories and production lines. Competitive pressure in the electric vehicle market, production costs, changes in vehicle mix and average selling prices may affect revenue and margin growth. Our model predicts gross profit from automotive sales at $3.39 billion, down 0.6% from the year-ago quarter level. The company's ability to sustain customer demand while protecting automotive margins will therefore remain an important factor in assessing the segment's performance. The Zacks Consensus Estimate for third-quarter sales and earnings is pegged at $27.8 billion and 43 cents/share. The consensus mark for earnings per share has moved down by 3 cents over the past 30 days. Our proven model does not conclusively predict an earnings beat for Tesla, as it does not have the right combination of a positive Earnings ESP and a favorable Zacks Rank. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter. The company has an Earnings ESP of -11.35% and a Zacks Rank #4 (Sell) at present. Here are a few players from the auto space that, per our model, have the right ingredients to post an earnings beat this time. Garrett Motion Inc. GTX is slated to release third-quarter 2026 results on Oct. 22. The company has an Earnings ESP of +1.24% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for Garrett's to-be-reported quarter's earnings and revenues is pegged at 49 cents per share and $945.6 million. GTX surpassed earnings estimates in each of the trailing four quarters, with the average surprise being 16.76%. Rivian Automotive, Inc. RIVN is slated to release third-quarter 2026 results on Oct. 29. The company has an Earnings ESP of +7.38% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for Rivian's to-be-reported quarter's loss and revenues is pegged at 66 cents per share and $1.97 billion. RIVN surpassed earnings estimates in each of the trailing four quarters, with the average surprise being 15.14%. Lear Corporation LEA is slated to release third-quarter 2026 results on Oct. 30. The company has an Earnings ESP of +3.26% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for Lear's to-be-reported quarter's earnings and revenues is pegged at $3.28 per share and $5.8 billion. LEA surpassed earnings estimates in each of the trailing four quarters, with the average surprise being 13.49%. You can see the complete list of today's Zacks #1 Rank stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Tesla, Inc. (TSLA) : Free Stock Analysis Report Lear Corporation (LEA) : Free Stock Analysis Report Garrett Motion Inc. (GTX) : Free Stock Analysis Report Rivian Automotive, Inc. (RIVN) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Tesla TSLA is set to release third-quarter 2026 results on Oct. 21, after the closing bell. The Zacks Consensus Estimate for the to-be-reported quarter's earnings and revenues is pegged at 44 cents per share and $27.8 billion, respectively. The consensus mark for third-quarter earnings has declined 3 cents in the past 30 days. The estimate for the bottom line implies a 12% contraction from the year-ago levels. The Zacks Consensus Estimate for quarterly revenues suggests a year-over-year fall of 1%. In the second quarter of 2026, the company missed earnings estimates by 34%. In the trailing four quarters, Tesla missed earnings estimates twice and beat twice, with the average negative earnings surprise being 3.7%. Tesla, Inc. price-consensus-eps-surprise-chart | Tesla, Inc. Quote Tesla reported third-quarter 2026 deliveries of 486,532 vehicles, up 1.3% sequentially but down 2.1% year over year. The company delivered 478,237 Model 3/Y vehicles and 8,295 other models compared with 481,166 and 15,933 units, respectively, in the year-ago quarter. The decline was primarily concentrated in other models, whose deliveries fell 47.9%. A key factor behind the year-over-year decline is the challenging comparison with the third quarter of 2025, when Tesla delivered a record 497,099 vehicles amid a rush to purchase electric vehicles (EVs) before the expiration of the $7,500 U.S. federal EV tax credit on Sept. 30, 2025. This demand pull-forward boosted the year-ago quarter's deliveries. Despite the year-over-year decrease, Tesla's third-quarter 2026 deliveries rose 1.3% sequentially, supported by a recovery in European sales and stronger demand for China-made vehicles in international markets. China-made Model 3 and Model Y sales, including exports, increased 5% year over year in September. We expect revenues from automotive sales to be $20.69 billion, while automotive gross margin is projected at 17.3%. Vehicle deliveries, pricing and production costs are likely to have influenced the company's automotive performance in the to-be-reported quarter. Tesla's Energy Generation and Storage segment remains a potential growth driver, supported by demand for its Megapack and Powerwall products. The company deployed 13.7 gigawatt-hours (GWh) of energy storage products in the third quarter, up 9.6% from the year-ago period and 1.5% from 13.5 GWh in the second quarter of 2026. This continued increase in deployments might have supported higher energy-related revenues. We expect revenues from the Energy Generation and Storage segment to be $3.76 billion, implying 10.2% year-over-year growth. Our estimate for revenues from the Services and Other segment is $4.29 billion, indicating 23.3% year-over-year growth. Our proven model does not conclusively predict an earnings beat for Tesla this earnings season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here. Earnings ESP:Tesla has an Earnings ESP of -12.85%. The Most Accurate Estimate is pegged at 6 cents, below the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter. Zacks Rank: Tesla currently carries a Zacks Rank #4 (Sell). Here are a few players from the auto space that, per our model, have the right ingredients to post an earnings beat this time. Garrett Motion Inc. GTX is slated to release third-quarter 2026 results on Oct. 22. The company has an Earnings ESP of +1.24% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for Garrett's to-be-reported quarter's earnings and revenues is pegged at 49 cents per share and $945.6 million. GTX surpassed earnings estimates in each of the trailing four quarters, with the average surprise being 16.76%. Rivian Automotive, Inc. RIVN is slated to release third-quarter 2026 results on Oct. 29. The company has an Earnings ESP of +7.38% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for Rivian's to-be-reported quarter's loss and revenues is pegged at 66 cents per share and $1.97 billion. RIVN surpassed earnings estimates in each of the trailing four quarters, with the average surprise being 15.14%. Lear Corporation LEA is slated to release third-quarter 2026 results on Oct. 30. The company has an Earnings ESP of +3.26% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for Lear's to-be-reported quarter's earnings and revenues is pegged at $3.28 per share and $5.8 billion. LEA surpassed earnings estimates in each of the trailing four quarters, with the average surprise being 13.49%. You can see the complete list of today's Zacks #1 Rank stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Tesla, Inc. (TSLA) : Free Stock Analysis Report Lear Corporation (LEA) : Free Stock Analysis Report Garrett Motion Inc. (GTX) : Free Stock Analysis Report Rivian Automotive, Inc. (RIVN) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

- Price change for Rivian stock in last 6 months: -6% - $RIVN Stock Price as of Oct. 2: $14 - 52-Week High: $23 - $RIVN Stock Price Target: $19 Rivian (RIVN:NASDAQ) reported record Q3 deliveries on Friday. The company delivered 19,248 vehicles in the quarter ended Sept. 30. Analysts had expected 18,001, based on Visible Alpha data. The new R2 SUV helped drive the beat. R2 deliveries began in June. It is cheaper than Rivian's R1S SUV and R1T pickup, which are both premium models. The R2 targets a broader segment of the mass EV market. Rivian also built 19,751 vehicles at its Normal, Illinois plant during the quarter. Even so, shares fell more than 2% in early trading. The reason was guidance. Rivian kept its 2026 delivery forecast at 65,000 to 70,000 vehicles. It said production and deliveries were in line with its expectations. Analysts, on average, expect 66,685 deliveries this year. Morningstar analyst Seth Goldstein said the market wanted a guidance raise after such a strong quarter. Rivian last raised its forecast in July. Investors wanted more. A record quarter was good news, but a steady forecast left some buyers disappointed. That is why Rivian stock dipped despite the beat. Goldstein said the results suggest the R2 ramp is on track. He expects volumes to rise in the coming quarters. That would help Rivian reach its full-year goal. The R2 matters a lot. Analysts see it as key to Rivian's growth. The EV market is also facing a tough backdrop in the US. Federal EV tax credits have ended. Tariffs and weaker industry demand add pressure. On the Q2 call, management said R2 deliveries would be weighted toward Q4. It also said a second shift at the Normal plant should start by the end of Q3. Rivian guided to 42,400 to 47,400 deliveries in the second half. Q3 came in at 19,248, so Q4 still needs to be bigger to hit the target. That makes Q4 a key test for Rivian stock. Rivian also has a long-term deal with Uber. Uber agreed to invest up to $1.25 billion. It plans to deploy fully autonomous R2 SUVs as robotaxis starting in 2028. Rivian will report full Q3 results on Oct. 29. That report should show margins and cash burn. For now, Rivian stock is caught between strong delivery numbers and a cautious outlook. The earnings report could decide where Rivian stock goes next. TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR's valuation model and see what RIVN stock could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It's free to use. Value RIVN for free→

IRVINE, Calif., October 02, 2026--(BUSINESS WIRE)--Rivian Automotive, Inc. (NASDAQ: RIVN) today announced production and delivery totals for the quarter ending September 30, 2026. The company produced 19,751 vehicles at its manufacturing facility in Normal, Illinois and delivered 19,248 vehicles during the same period. Production and delivery results for the quarter are in line with Rivian's outlook. The company is reaffirming its 2026 delivery range guidance of 65,000 - 70,000. The company also announced that on October 29, 2026, after market close, it will release its third quarter 2026 financial results. Rivian will host an audio webcast at 5:00 p.m. ET the same day to discuss the performance and outlook for the business. The live webcast will be available at https://rivian-q3-earnings-webcast-2026.open-exchange.net and a replay will be available for four weeks at www.rivian.com/investors following the webcast. About Rivian: Rivian (NASDAQ: RIVN) is an American automotive technology company that develops and manufactures category-defining electric vehicles as well as vertically integrated technologies and offers a suite of value-added services. Through innovation across its electrical architecture, end-to-end software, autonomous driving platform, artificial intelligence, and propulsion, the company creates vehicles that excel at work and play with the goal of accelerating the global transition to zero-emission transportation and energy. Rivian vehicles are manufactured in the United States and are sold directly to consumer and commercial customers. Whether taking families on new adventures or electrifying fleets at scale, Rivian vehicles all share a common goal — preserving the natural world for generations to come. Learn more about the company, products, and careers at www.rivian.com. Forward-Looking Statements: This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including without limitation statements regarding our annual delivery outlook. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition, and results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements, including, but not limited to, the important factors discussed in Part II, Item 1A, "Risk Factors" in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2026, and our other filings with the Securities and Exchange Commission. The forward-looking statements in this press release are based upon information available to us as of the date of this press release, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely upon these statements. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change. View source version on businesswire.com: https://www.businesswire.com/news/home/20261002177772/en/ Contacts Investors: [email protected] Media: Harry Porter, [email protected]

Tesla (NASDAQ: TSLA) stock currently trades at about 350 times earnings. That's a towering premium to other automotive stocks. Ford Motor Company (NYSE: F), for example, trades at just 11 times earnings. Many competing pure-play electric vehicle (EV) stocks don't currently generate profits, making them difficult to compare on an earnings basis to Tesla. On a revenue basis, however, Tesla currently trades at 13 times sales. Rivian (NASDAQ: RIVN), meanwhile, trades at just 3.2 times sales, while Lucid Group (NASDAQ: LCID) hovers at less than 1 times sales. Missed AI's "Act 1"? Act 2 Could Be 15x Bigger. Most investors think they missed the AI boat because they didn't buy Nvidia in 2005. But according to our analysts, we're only at the end of "Act 1"—the R&D phase. "Act 2" is the global rollout. Continue » Any way you look at it, Tesla stock trades at a premium to its various peer groups. Why are the shares priced at such a premium? Part of the answer is actually quite simple. The other is based on investor expectations for the future. Taking a look at Tesla's historical valuation versus its profitability metrics gives us a clearer picture of why Tesla stock trades at such high multiples. For much of 2024, Tesla stock traded between 40 and 70 times earnings. Profit margins that year averaged around 12%, with some quarters exceeding 15%. However, as margins dipped in 2025, Tesla's valuation failed to follow suit. Instead, the market simply increased the amount it was willing to pay per dollar of earnings, thus keeping Tesla's stock price more stable than its declining profit margins would suggest. Even as profit margins continued to slide, the market remained unwilling to let Tesla's stock price slide in tandem. Falling margins had several causes, including the loss of federal subsidies, rising spending in other parts of the business, such as artificial intelligence (AI), increased EV competition, and price cuts. Much of Tesla's premium valuation, therefore, stems not from past success but a lack of belief that the slump in profit margins will endure. That belief is largely fueled by expectations for future growth, which we will discuss next. TSLA PE Ratio data by YCharts. If we apply a 15% profit margin to Tesla's trailing revenue and then assume today's price-to-earnings (P/E) ratio, Tesla stock would trade at roughly $1,500 per share. Of course, in this scenario, Tesla's P/E ratio would likely fall. But an expectation that profit margins will rebound to past levels is clearly part of Tesla's current premium valuation. Why might profit margins widen? Higher sales for Tesla's Semi truck and other new products should help. But in my view, it's really robotaxi growth that could make the biggest difference. Robotaxis are a major reason Wall Street remains so bullish on Tesla stock. According to Tesla bull and Ark Invest Chief Executive Officer Cathie Wood, the robotaxi market could become an $8 trillion to $10 trillion opportunity worldwide. Due to its high degree of vertical integration, Tesla is in a unique position. Its existing manufacturing scale allows it to produce Cybercabs at an exceptionally low cost versus the competition. This could allow it to take a heavy share of this potential market. Scaling Cybercab production and taking a cut of tens of billions of self-driving taxi rides could help Tesla revive sales growth. Importantly, robotaxi rides are likely much higher margin than vehicle sales. Uber Technologies (NYSE: UBER), for example, generates about 17% profit margins. Tesla stock trades at a premium because the market believes sales growth and profit margin recovery are on the horizon. Tesla's robotaxi exposure alone could deliver on both expectations. Ever feel like you missed the boat in buying the most successful stocks? Then you'll want to hear this. On rare occasions, our expert team of analysts issues a "Double Down" stock recommendation for companies that they think are about to pop. If you're worried you've already missed your chance to invest, now is the best time to buy before it's too late. And the numbers speak for themselves: - Nvidia: if you invested $1,000 when we doubled down in 2009, you'd have $590,699!* - Apple: if you invested $1,000 when we doubled down in 2008, you'd have $62,835!* - Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $379,123!* Right now, we're issuing "Double Down" alerts for three incredible companies, available when you join Stock Advisor, and there may not be another chance like this anytime soon. See the 3 stocks » *Stock Advisor returns as of September 28, 2026 Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool recommends Uber Technologies. The Motley Fool has a disclosure policy. Tesla Trades at 350 Times Earnings. Here's What Has to Be True for That to Make Sense. was originally published by The Motley Fool