Tesla shares were up 4.03% at $369.02 at the time of publication on Monday, according to Benzinga Pro. Tesla is due to report third-quarter earnings on Wednesday, Oct. 21, after the closing bell. Forecasts call for earnings of 43 cents per share on $27.88 billion in sales.
Earnings at the forecast level would suggest that the decline in Tesla's earnings is stabilizing. Earnings of 43 cents per share would exceed second-quarter adjusted earnings of 33 cents per share. Second-quarter adjusted earnings per share had fallen approximately 18% year over year. The sales forecast is about 1.3% below second-quarter sales of $28.24 billion. The sales forecast is roughly 0.8% below sales in the third quarter of 2025.
Tesla's sales rose 26% to $28.24 billion last quarter. However, Tesla's operating income fell 57% to $398 million. Tesla's operating margin fell to 1.4%, compared with 4.1% in the prior-year quarter. Tesla's spending of $5.79 billion on capital projects pushed free cash flow to negative $1.09 billion.
Speculation about a Tesla-SpaceX merger has intensified in recent days. Tesla staged the second-generation Roadster's debut on Thursday night at SpaceX's test site in McGregor, Texas. SpaceX thrusters enabled the Roadster to travel inverted on a curved ramp, tumble in midair and leap over a lineup of Tesla vehicles.
Wedbush analyst Dan Ives believes the demonstration strengthened the argument for merging Tesla and SpaceX. Barclays has also raised the possibility of a deal ahead of Tesla's annual shareholder meeting in early December. Investor Ross Gerber and Gene Munster of Deepwater Asset Management likewise predict that Tesla and SpaceX will merge.
Cantor Fitzgerald analyst Andres Sheppard began the week with an Overweight rating and a $485 price target for Tesla. Sheppard's note highlighted last week's Roadster demonstration. Sheppard said compressed-gas thrusters adapted from SpaceX technology let the Roadster float and accelerate from a standstill to 60 mph in under one second. Elon Musk said during the demonstration that Tesla aims to start building the Roadster in 2028. Tesla has a consensus Buy rating with an average price forecast of $415, according to Benzinga data.
Tesla shares crossed above the 50-day moving average of $360.27 on Monday, returning above a key medium-term trend line. Tesla shares were last above the 50-day moving average but below the 20-day moving average of $370.01. Tesla shares were also below the 200-day moving average of $387.59.
Tesla Stock Rises Ahead of Q3 Earnings Report
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Summary
Tesla shares climbed 4.03% to $369.02 on Monday, ahead of its Q3 earnings report on October 21. Analysts expect 43 cents per share on $27.88 billion in revenue, up from Q2. On-chain news shows rising interest in the stock ahead of the report. Recent AI + crypto news has also fueled speculation about a possible Tesla-SpaceX merger after a Roadster demo used SpaceX tech.
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