Financial Overview - Tesla's Q4 2025 total revenue is expected to be $24.49 billion, with automotive revenue at $17.29 billion, energy revenue at $3.83 billion, and services and other revenue at $3.38 billion[3] - The projected gross margin is 17.0%, with automotive Non-GAAP gross margin at 14.3% and energy gross margin at 29.1%[3] - Operating profit is anticipated to be $1.05 billion, resulting in an operating margin of 4.3%[3] - Net profit attributable to shareholders is expected to be $1.05 billion, with earnings per share (EPS) at $0.30 and Non-GAAP EPS at $0.44[3] Production and Delivery Expectations - Q4 2025 vehicle deliveries are projected at 418,000 units, with Model 3/Y accounting for 407,000 units and other models for 12,000 units, falling short of market expectations[3] - Energy deployment is expected to reach 14.2 GWh, exceeding market expectations and marking a quarterly record[3] - Total vehicle deliveries for 2025 are forecasted at 1.636 million units, with production capacity at 1.655 million units and energy deployment at 46.7 GWh[3] 2026 Projections - For 2026, vehicle deliveries are expected to be 1.723 million units, with energy deployment at 65.1 GWh[4] - Total revenue for 2026 is projected to be $104.1 billion, with net profit attributable to shareholders at $5.2 billion and Non-GAAP EPS at $2.03[4] - Capital expenditures are expected to be $10.9 billion, with free cash flow projected at $2.9 billion[4]

Industry Overview - The Zacks Domestic Auto industry encompasses companies involved in designing, manufacturing, and retailing various types of vehicles, including passenger cars, trucks, and electric vehicles [2] - The industry is highly consumer cyclic and is undergoing significant transformation due to technological advancements and digitization [2] Factors Affecting Industry Prospects - The newly introduced tariff by President Trump is expected to worsen affordability issues, with average new car prices nearing $50,000, potentially leading to higher costs for consumers [3] - Economic uncertainty is projected to impact demand, with the Fed reducing its GDP growth forecast for 2025 from 2.1% to 1.7% and raising core inflation estimates to 2.8% [4] - The introduction of more affordable electric vehicles (EVs), priced at $35,000 or less, is anticipated to attract buyers despite economic challenges [5] Current Industry Ranking and Performance - The Zacks Automotive – Domestic industry currently holds a Zacks Industry Rank of 188, placing it in the bottom 23% of 250 Zacks industries, indicating dim near-term prospects [6][7] - The industry's earnings estimates for 2025 and 2026 have decreased by 42.9% and 15.6%, respectively, over the past year, reflecting a negative earnings outlook [8] Market Performance - Over the past year, the Domestic Auto industry has outperformed the auto sector but lagged behind the Zacks S&P 500 composite, with a decline of 4.2% compared to the sector's 16.4% and S&P 500's 1.9% [11] Valuation Metrics - The industry is currently trading at an EV/EBITDA ratio of 26.02X, significantly higher than the S&P 500's 14.96X and the sector's 14.69X, indicating a premium valuation despite being debt-laden [14] Company Highlights - **Blue Bird Corporation (BLBD)**: Engaged in manufacturing school buses, with a strong order backlog of nearly 4,400 units. The company expects a record full-year adjusted EBITDA margin of 14% for fiscal 2025 [19][20] - **Tesla, Inc. (TSLA)**: Recognized as a technology innovator in the EV space, with plans for Full Self-Driving services and new product launches expected to enhance profitability. The Zacks Consensus Estimate for 2025 sales and EPS implies year-over-year growth of 7.54% and 9.92%, respectively [23][24] - **General Motors Company (GM)**: Holds a 16.5% market share in the U.S. and has achieved significant cost reductions. The Zacks Consensus Estimate for GM's 2025 EPS indicates year-over-year growth of 8.58% [27][28]