Cantor Fitzgerald reiterates Tesla stock rating on strong cash flow

Cantor Fitzgerald has maintained its Overweight rating and price target of $485 on Tesla (NASDAQ:TSLA) stock following the company's third-quarter results. The firm's analysts were impressed by Tesla's strong cash flow, reporting free cash flow of approximately $1,531 million, which significantly exceeded the consensus estimate of negative $4,385 million.

This improvement was primarily due to capital expenditures of around $4.7 billion, a notable decrease from the prior estimate of $8 billion. Tesla's GAAP gross margin for the quarter stood at 19.6%, surpassing the firm's estimate of 17.1%, and automotive gross margin excluding regulatory credits reached 18.1%. Despite the positive performance, investing data suggests the stock is overvalued relative to its Fair Value.

For fiscal year 2026, Tesla's capital expenditure target was revised downwards to $20 billion from the previous estimate of $25 billion. The reduction in capital expenditure is driven by Full Self-Driving technology, identified as a key growth driver for the company. Additionally, Tesla reported third-quarter non-GAAP earnings per share of $0.48, surpassing StoneX's estimate of $0.44 and the consensus of $0.45.

The company's revenue for the quarter was $28.0 billion, slightly above StoneX's estimate but below the consensus.