Bottom-Line View
At ~90× 2025e EPS and ~15× 2026e FCF the stock still embeds a fully-functioning robotaxi network, material humanoid-robot monetization and only limited tariff/margin damage. None of those three assumptions is de-risked today. With the equity back above the Street’s $305 median target and the next hard data point (Q3 deliveries) likely to show another YoY decline, we keep a neutral / hold stance. Upside exists if Austin robotaxi service can drop safety drivers in 1H-26 and management proves tariff pass-through without further ASP cuts; otherwise multiple compression remains the path of least resistance.
Positioning
- Core long-only mandates: reduce to benchmark weight (was +50 bp OW); recycle capital into cheaper AI-hardware winners (NVDA, AVGO).
- Hedge / trading: buy Jan-26 300 puts (cost ~$28) financed with Jan-26 450 calls (credit ~$13) to hold convexity around autonomy catalysts.
- Long-term growth sleeve: maintain a tracking position but wait for either (1) Q3 GM >19 % or (2) evidence of unsupervised robotaxi miles before re-rating.
Conclusion
Tesla remains the purest listed play on consumer-facing autonomy and distributed storage, but the equity already discounts a timely robotaxi rollout, benign tariff outcomes and a swift margin recovery. Until one of those thesis pillars turns into verifiable cash flow, the risk-reward at >30 % premium to the Street target skews neutral to negative. Hold/don’t chase.
