Why Analysts Are Cautious on Tesla Stock (TSLA) Ahead of Q4 Earnings

Analysts have assigned a "Hold" consensus rating to Tesla (TSLA) stock ahead of its fiscal fourth-quarter results, due after the market close on January 28. Wall Street expects the electric vehicle (EV) giant to report a significant drop in earnings and a modest decline in revenue, driven by a prolonged slump in auto sales.Claim 50% Off TipRanks PremiumUnlock hedge fund-level data and powerful investing tools for smarter, sharper decisions Stay ahead of the market with the latest news and analysis and maximize your portfolio's potential Having said that, Tesla's energy storage business remains a potential bright spot. Moreover, CEO Elon Musk's vision of transforming Tesla into an AI, autonomous driving, and robotics powerhouse offers long-term optimism. Expectations from Tesla Analysts project Tesla to post adjusted earnings per share (EPS) of $0.45, down 38% from the prior-year period. Revenue is forecast to fall 3.7% year-over-year to $24.77 billion, with about $17.29 billion (roughly 70%) coming from auto sales. Tesla's own sell-side estimates project total auto deliveries of 1.72 million units for 2026, with Model 3 and Model Y accounting for 1.63 million. For the full year fiscal 2026, adjusted EPS is projected at $2.03, with sales of $104.15 billion. Investors and analysts will pay close attention to updates on key catalysts, including the robotaxi rollout without safety monitors, unsupervised Full Self-Driving (FSD) with phased "eyes off" capability by 2026, AI5 inference chips, and the timeline for the launch of Optimus Gen 3 humanoid robot. Analysts View Ahead of Q4 Results Goldman Sachs analyst Mark Delaney cautioned about intensifying competition in the self-driving technology, where Tesla aims to take a lead. He noted that while Tesla's FSD and robotaxi operations will expand over time, rivals will limit profit growth. Delaney maintained a Hold rating and $400 price target, implying 8.1% downside potential from current levels. Similarly, Barclays analyst Dan Levy reiterated his Hold rating but lifted his price target from $350 to $360, implying 17.3% downside potential. The adjustment came after Tesla launched public robotaxi rides without safety monitors in Austin, the first since its June 2025 debut. This brings Tesla closer to competitors like Alphabet's (GOOGL) Waymo and Amazon's (AMZN) Zoox. However, Levy noted that Tesla's Austin fleet remains modest seven months in, with 30 to 50 vehicles total and only 10 operating concurrently, well short of Musk's goal of 500 by the end of 2025. High demand and limited capacity are constraining availability, though Tesla emphasizes driverless operations to reduce safety monitor costs before scaling. Meanwhile, analysts at UBS and HSBC maintained their Sell ratings on Tesla, citing similar headwinds. Is Tesla a Good Stock to Buy Now? On TipRanks, Tesla has garnered nine Buys, eight Holds, and seven Sell ratings over the past three months. The average Tesla price target of $393.06 implies 9.7% downside potential from current levels. Meanwhile, Tesla shares have gained 9.6% over the past year.