Why Is Tesla (TSLA) Down 12% Since Last Earnings Report?

Core Viewpoint - Tesla's third-quarter earnings report revealed mixed results, with earnings per share missing estimates while total revenues exceeded expectations, leading to questions about the stock's future performance [2][12]. Financial Performance - Tesla reported Q3 2025 earnings per share of 50 cents, missing the Zacks Consensus Estimate of 53 cents and down from 72 cents year-over-year [2]. - Total revenues reached $28.1 billion, surpassing the Zacks Consensus Estimate of $26.4 billion and reflecting a 12% year-over-year increase [2]. - Automotive revenues totaled $21.2 billion, up 6% year-over-year, exceeding the estimate of $18.86 billion [4]. - Energy Generation and Storage revenues were $3.4 billion, a 44% increase year-over-year, beating the estimate of $2.9 billion [6]. - Services and Other revenues amounted to $3.5 billion, up 25% year-over-year, also surpassing the estimate of $3.35 billion [6]. Production and Deliveries - Q3 production totaled 447,450 units, a 5% decline year-over-year, missing the estimate of 451,948 units [3]. - Vehicle deliveries reached 497,099, a 7% increase year-over-year, exceeding the estimate of 435,370 units [3]. - Model 3/Y deliveries were 481,166, up 9% year-over-year, surpassing expectations of 416,456 units [3]. Margins and Cash Flow - Automotive gross margin was 14.7%, down from 16.4% in Q3 2024 [4]. - Operating margin declined by 501 basis points year-over-year to 5.8%, but was above the estimate of 4.9% [5]. - Net cash provided by operating activities was $6.24 billion, slightly down from $6.26 billion year-over-year [8]. - Free cash flow generated during the quarter was $4 billion, compared to $2.7 billion in Q3 2024 [8]. Financial Position - As of September 30, 2025, Tesla had cash and cash equivalents of $41.6 billion, up from $36.6 billion at the end of 2024 [7]. - Long-term debt and finance leases totaled $5.78 billion, a slight increase from $5.75 billion at the end of 2024 [7]. Market Position and Outlook - Tesla's stock has a Zacks Rank of 3 (Hold), indicating an expectation of in-line returns in the coming months [12]. - Estimates for Tesla have trended upward recently, although the overall VGM Score is D, reflecting challenges in value and momentum [10][11].