Equity markets in the U.S. are expected to remain volatile in the near term, given the trade war escalations with China and other countries. Moreover, the upcoming earnings season is likely to drive volatility higher, especially if companies lower their outlooks due to macroeconomic headwinds and slowing consumer demand.
The tariff war is expected to increase the cost of goods across multiple sectors, such as automobiles, which will drive down demand and potentially increase inflation. Furthermore, if inflation rises, the Federal Reserve will be forced to raise interest rates, which will lower the discretionary income of households.
It’s pretty evident that investors and analysts will be closely watching the earnings season to analyze the impact of tariffs on future growth. Tesla (TSLA), the largest automobile company globally in terms of market capitalization, will report its Q1 earnings on April 22. So, let’s see what Wall Street expects from the auto giant in the March quarter.
Will Tesla Beat Estimates in Q1 of 2025?
Analysts tracking Tesla expect the electric vehicle manufacturer to report revenue of $21.5 billion with adjusted earnings per share of $0.42 in the March quarter. It suggests that revenue growth is forecast at 1.1% while earnings might decline by 6.7% year over year.
For 2025, Tesla is forecast to increase revenue by 9.44% to $107 billion and earnings by 4% year over year to $2.52 per share. So, TSLA stock is priced at 7.3x forward sales and 95.8x forward earnings, which is quite steep, given its slowing growth rates.
Notably, Tesla has missed earnings estimates in three of the last four quarters, which has driven its share prices lower. The EV maker has already missed vehicle delivery estimates in Q1 and might issue disappointing guidance for the rest of 2025 as it grapples with rising competition and slowing demand.
What’s Next for Tesla Stock?
Tesla capped off 2024 with record vehicle deliveries at an annualized rate of nearly 2 million units, with the Model Y becoming the best-selling vehicle of any kind globally last year. During Tesla’s Q4 earnings call, CEO Elon Musk outlined an ambitious vision for the company’s future, predicting “epic” growth in 2026 and “ridiculously good” performance in 2027 and 2028, driven primarily by autonomous vehicles and humanoid robots.
Tesla plans to launch unsupervised full self-driving (FSD) as a paid service in Austin by June, with expansion to other U.S. cities by the end of the year. Tesla is already operating autonomous vehicles with no human supervision at its Fremont factory and plans to extend this to its Texas facility soon.
Musk emphasized that several major automakers have expressed interest in licensing Tesla’s Full Self-Driving (FSD) technology, although the company won’t entertain such discussions until unsupervised driving is working throughout the United States.
On the robotics front, Tesla aims to produce several thousand Optimus humanoid robots this year for internal use at its factories. Musk predicted that the company could reach a monthly production of 10,000 units next year and potentially scale to 100,000 units thereafter, suggesting that Optimus could eventually generate “north of $10 trillion in revenue.”
Tesla also continues to invest in energy storage, with a second factory in Shanghai set to start operations and a third facility in the works. The company expects at least 50% growth in deployments year-over-year in 2025.
For 2025, Tesla projects flat capital expenditures compared to 2024 and plans to introduce several new products, including a more affordable vehicle model in the first half of the year.
What Is the Target Price for TSLA Stock?
Despite its massive size, analysts expect Tesla to grow its earnings by 22.7% annually over the next five years. Compared to this, estimated adjusted earnings growth is much higher at 39%.
Tesla is forecast to report adjusted earnings of $9.42 per share in 2029. So, if TSLA stock is priced at 40 times forward earnings, it will trade around $375 per share in April 2029, indicating upside potential of over 50% from current levels.
Out of the 41 analysts covering TSLA stock, 16 recommend “Strong Buy,” three recommend “Moderate Buy,” 12 recommend “Hold,” and 10 recommend “Strong Sell.” The average target price for TSLA stock is $304.83, which is 35% higher than the current price.
