William Blair analysts increased their Q3 delivery projections for Tesla (NASDAQ:TSLA) on Tuesday, but cautioned that the stock’s high valuation makes it “increasingly difficult” to maintain a positive outlook.
In a note ahead of Tesla’s results on October 2, the firm highlighted that the expiration of the $7,500 U.S. electric vehicle tax credit has spurred stronger-than-expected early demand.
“We now estimate 480,000 deliveries versus the Street’s 443,000,” William Blair wrote, noting that U.S. demand for the new Model Y has been a “bright spot,” while recoveries in China and other regions have offset softer sales in Europe.
Despite the increase in forecasted deliveries, the analysts expressed caution. “Next quarter we are cautious on margins from a hangover on auto deliveries and lower regulatory credit revenue,” they said.
Interest in Tesla’s robotaxi program, Elon Musk’s recent stock purchase, and new energy storage products has “pushed the stock to near all-time highs.”
The note added that Tesla shares are currently trading at “an enterprise value of 118x our 2026 EBITDA estimate… a significant premium to technology peers at 20-25x.” Analysts warned that impacts from the OBBB could require “a reset to Street consensus as the multiple premium will be put under pressure.”
William Blair kept its Market Perform rating but admitted it is “finding it increasingly difficult to maintain” given the lofty valuation. The firm said it would seek “more data points on our bullish views on energy storage and robotaxi to regain momentum” after estimates are adjusted, while also flagging risks from rising competition in China, geopolitical exposure to China, and “key-man risk with CEO Elon Musk.”
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