Should You Buy Tesla Stock Right Now? The Answer Might Surprise You.
Tesla's electric vehicle business just took another step backwards.
Investors are considering whether to purchase Tesla (TSLA) stock at this moment, and the answer may come as a surprise. Over 70% of the company's earnings still originate from passenger electric vehicle (EV) sales, which have been struggling due to intense global competition. While Tesla's EV deliveries increased by 16% in the first half of 2026 compared to the previous year, they declined by 2% year-over-year in the third quarter.
The company's generally accepted accounting principles (GAAP) earnings per share experienced a 44% decline during the same period, and its trailing 12-month earnings have decreased by 79% over the last two years. Tesla's stock is currently trading at a price-to-earnings (P/E) ratio of 434, which is 14 times higher than the Nasdaq-100 index.
This high valuation is due to the shrinking earnings and the company's ambitious plans for growth. Tesla's CEO, Elon Musk, is shifting focus away from passenger EVs towards the Optimus humanoid robot and autonomous vehicles. However, Optimus is still years away from commercialization, and the Cybercab is currently operating in a limited area in Austin, Texas.
Tesla's regulatory challenges with full self-driving software also pose a risk. Considering these factors, it appears that Tesla stock is not a buy at the moment, and investors should exercise caution.
Written by urgent.news from Motley Fool's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
