Tesla or Ford: Which Stock is Worth Buying Ahead of Q4 Earnings?

Core Insights - Investors are closely monitoring Tesla and Ford as they approach their fourth-quarter 2025 earnings reports, with Tesla set to report tomorrow and Ford on February 10 [1] Tesla (TSLA) Summary - The Zacks Consensus Estimate for Tesla's Q4 earnings is 45 cents per share and $25.1 billion in revenue, with a history of missing EPS estimates three out of the last four quarters, averaging an 11.1% negative surprise [2] - Tesla's Q4 2025 vehicle sales fell 16% year-over-year to 418,227 units, missing expectations due to the withdrawal of the $7,500 federal EV tax credit and increased competition from Chinese EV manufacturers [6][7] - The Zacks Consensus Estimate for Tesla's 2026 EPS has declined by 10 cents over the past 30 days, indicating rising analyst pessimism [14] - Tesla's valuation remains high at a forward sales multiple of 13.67x, reflecting a stretched valuation compared to Ford [15] Ford (F) Summary - The Zacks Consensus Estimate for Ford's Q4 earnings is 17 cents per share and $41 billion in automotive revenues, with a solid earnings surprise history, beating estimates in the past four quarters [3] - Ford's Q4 2025 sales increased by 2.7% to over 545,200 vehicles, with hybrid sales growing 17.6% year-over-year, driven by strong demand [8] - Ford expects approximately $19.5 billion in special charges related to restructuring its U.S. EV strategy, with $5.5 billion impacting cash flows through 2026 and 2027 [8][10] - Ford's 2026 EPS estimate has risen by 6 cents over the past week to $1.54, implying a 36% growth from projected 2025 levels [11] - Ford's valuation is significantly cheaper at 0.31x forward sales, making it a more attractive investment option compared to Tesla [15] Comparative Analysis - The risk-reward setup appears to favor Ford, with strong earnings momentum and improving sales trends, despite the impact of restructuring charges on cash flows [17] - Tesla faces challenges from slowing deliveries and competition, with its long-term initiatives in autonomy and AI unlikely to generate significant revenue in the near term [18]