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Should You Buy, Hold or Sell TSLA Stock After Its Cybercab Fleet Jump?
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Key Takeaways
Tesla's Cybercab fleet has topped 300 vehicles, but regulatory hurdles and fierce robotaxi competition loom.
Tesla faces shrinking automotive margins, while 2026 capital spending is expected to exceed $25 billion.
TSLA's premium valuation, falling earnings estimates and delayed timelines weaken its investment story.
Tesla’s (TSLA - Free Report) Cybercab, a two-seater built without a steering wheel or pedals, commenced public rides in Austin early last month. The fleet has grown past 300 vehicles in a month, roughly eight times its launch size, per Teslarati, and Dallas looks like the next stop.
Going from a handful of vehicles to more than 300 in 30 days is impressive. But Tesla still has a lot of catching up to do when we look at Alphabet’s (GOOGL - Free Report) standing in the robotaxi space. Tesla’s robotaxi hubs have logged about 380,000 driverless miles in total, per the company’s last earnings release. Alphabet’s Waymo passed that mark years ago and has since accumulated over 220 million rider-only miles, with a fleet approaching 4,000 vehicles in cities Tesla hasn’t entered.
Waymo isn’t the only rival. Amazon's (AMZN - Free Report) Zoox— another purpose-built robotaxi with no steering wheel or pedals— has been running paid rides in Las Vegas and is preparing to expand into San Francisco and Austin, putting it on a very similar playbook to Cybercab.
The Cybercab rollout is also drawing federal scrutiny. NHTSA has opened an audit query into whether the Cybercab meets U.S. safety standards, and one issue stands out— a braking rule that calls for a foot control, which a pedal-free car doesn’t have. The agency wants answers to 21 requests and has given Tesla until Oct. 30 for the same.
How this resolves matters. An unfavorable finding could force design changes or limit where and how the vehicle operates, which would undermine the expansion plan.
Does the Cybercab fleet expansion make the investment case stronger for Tesla? Or are there too many headwinds that are hard to ignore? Let’s discuss.
TSLA’s Core Business Is Earning Less
Tesla’s third-quarter deliveries came in at 486,532 units, ahead of the Zacks Consensus Estimate of 471,262 but 2.1% lower than a year earlier. It was Tesla’s strongest quarter since the third quarter of 2025, but the year-over-year comparison was a tough one. That period was boosted by U.S. buyers rushing to purchase before federal EV tax credits expired, which created a temporary surge in demand. Tesla deployed 13.7 GWh of energy storage products during the third quarter of 2026, up 9.6% year over year.
While deliveries and deployments are encouraging, they are not translating into profit growth. Automotive gross margin, excluding regulatory credits, fell to 16.3% in the second quarter of 2026 as pricing pressure continued. Energy storage business margin dropped to 20.4% from 39.5%.
Tesla Capex Pressure
At the same time, capital spending is expected to top $25 billion in 2026, which will keep free cash flow under strain. Optimus is still early-stage, and Cybercab is only beginning to scale. Both could pay off eventually, but for now they are costs.Tesla is investing heavily in autonomy, AI, robotics and manufacturing capacity, but there is still no clear timeline for when these investments will generate meaningful financial returns.
Missed Timelines Erode Trust
Tesla moved its Roadster demonstration from Oct. 1 to Oct. 15, citing severe weather in central Texas. A two-week delay is minor on its own. But it adds to a long record of postponements. Investors have grown used to Tesla missing deadlines, and each new slip makes the next promise harder to believe. That matters most now, because the company is asking investors to trust its least-proven projects.
TSLA Price Performance, Valuation & Estimates
Shares of Tesla have declined 12% over the past year, underperforming the industry.
Image Source: Zacks Investment Research
From a valuation standpoint, TSLA trades at a forward price-to-sales ratio of 13.08, above the industry and its own five-year average. It carries a Value Score of D.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Tesla’s 2026 and 2027 EPS implies year-over-year growth of 2% and 34%, respectively. EPS estimates have been revised downward in the past 60 days.
Image Source: Zacks Investment Research
How to Play Tesla Now
The stock is priced for autonomy and robotics to become major profit centers, while the businesses that pay for those bets are witnessing declining profits. That gap between expectations and current results is the main risk. Valuation makes the case harder to defend. Earnings estimates are also being cut ahead of Tesla's Oct. 21 earnings report, reflecting analysts’ eroding confidence.
Existing shareholders should consider trimming or locking in any profits and new investors should stay away. TSLA stock currently carries a Zacks Rank #4 (Sell).
View the Zacks #1 Rank List
Image: Bigstock
Should You Buy, Hold or Sell TSLA Stock After Its Cybercab Fleet Jump?
Key Takeaways
Tesla’s (TSLA - Free Report) Cybercab, a two-seater built without a steering wheel or pedals, commenced public rides in Austin early last month. The fleet has grown past 300 vehicles in a month, roughly eight times its launch size, per Teslarati, and Dallas looks like the next stop.
Going from a handful of vehicles to more than 300 in 30 days is impressive. But Tesla still has a lot of catching up to do when we look at Alphabet’s (GOOGL - Free Report) standing in the robotaxi space. Tesla’s robotaxi hubs have logged about 380,000 driverless miles in total, per the company’s last earnings release. Alphabet’s Waymo passed that mark years ago and has since accumulated over 220 million rider-only miles, with a fleet approaching 4,000 vehicles in cities Tesla hasn’t entered.
Waymo isn’t the only rival. Amazon's (AMZN - Free Report) Zoox— another purpose-built robotaxi with no steering wheel or pedals— has been running paid rides in Las Vegas and is preparing to expand into San Francisco and Austin, putting it on a very similar playbook to Cybercab.
The Cybercab rollout is also drawing federal scrutiny. NHTSA has opened an audit query into whether the Cybercab meets U.S. safety standards, and one issue stands out— a braking rule that calls for a foot control, which a pedal-free car doesn’t have. The agency wants answers to 21 requests and has given Tesla until Oct. 30 for the same.
How this resolves matters. An unfavorable finding could force design changes or limit where and how the vehicle operates, which would undermine the expansion plan.
Does the Cybercab fleet expansion make the investment case stronger for Tesla? Or are there too many headwinds that are hard to ignore? Let’s discuss.
TSLA’s Core Business Is Earning Less
Tesla’s third-quarter deliveries came in at 486,532 units, ahead of the Zacks Consensus Estimate of 471,262 but 2.1% lower than a year earlier. It was Tesla’s strongest quarter since the third quarter of 2025, but the year-over-year comparison was a tough one. That period was boosted by U.S. buyers rushing to purchase before federal EV tax credits expired, which created a temporary surge in demand. Tesla deployed 13.7 GWh of energy storage products during the third quarter of 2026, up 9.6% year over year.
While deliveries and deployments are encouraging, they are not translating into profit growth. Automotive gross margin, excluding regulatory credits, fell to 16.3% in the second quarter of 2026 as pricing pressure continued. Energy storage business margin dropped to 20.4% from 39.5%.
Tesla Capex Pressure
At the same time, capital spending is expected to top $25 billion in 2026, which will keep free cash flow under strain. Optimus is still early-stage, and Cybercab is only beginning to scale. Both could pay off eventually, but for now they are costs.Tesla is investing heavily in autonomy, AI, robotics and manufacturing capacity, but there is still no clear timeline for when these investments will generate meaningful financial returns.
Missed Timelines Erode Trust
Tesla moved its Roadster demonstration from Oct. 1 to Oct. 15, citing severe weather in central Texas. A two-week delay is minor on its own. But it adds to a long record of postponements. Investors have grown used to Tesla missing deadlines, and each new slip makes the next promise harder to believe. That matters most now, because the company is asking investors to trust its least-proven projects.
TSLA Price Performance, Valuation & Estimates
Shares of Tesla have declined 12% over the past year, underperforming the industry.
From a valuation standpoint, TSLA trades at a forward price-to-sales ratio of 13.08, above the industry and its own five-year average. It carries a Value Score of D.
The Zacks Consensus Estimate for Tesla’s 2026 and 2027 EPS implies year-over-year growth of 2% and 34%, respectively. EPS estimates have been revised downward in the past 60 days.
How to Play Tesla Now
The stock is priced for autonomy and robotics to become major profit centers, while the businesses that pay for those bets are witnessing declining profits. That gap between expectations and current results is the main risk. Valuation makes the case harder to defend. Earnings estimates are also being cut ahead of Tesla's Oct. 21 earnings report, reflecting analysts’ eroding confidence.
Existing shareholders should consider trimming or locking in any profits and new investors should stay away. TSLA stock currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.