Long Straddle Play As TSLA Earnings About Proving “Valuation Gap” To Maintain Its Premium
$Tesla Motors(TSLA)$’s fiscal Q4 2025 earnings, scheduled for release on January 28, 2026, arrive at a critical juncture as the company’s valuation increasingly detaches from its core automotive performance.
The Financial Outlook
Wall Street is braced for a significant year-over-year decline. The consensus estimates include:
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Non-GAAP EPS: ~$0.44–$0.45 (a nearly 40% YoY drop).
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Revenue: ~$24.8–$25.0 billion (down ~3% YoY).
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Automotive Margins: Investors are looking for stabilization around 14.8%–15.0%.
The primary drag is the automotive segment. Tesla already reported 418,227 deliveries for Q4, a 15.6% YoY decline, attributed to the expiration of U.S. tax credits in Q3 and an aging product lineup.
The "Tech Pivot" Strategy
1. Because the car business is slowing, the earnings call will likely be an "AI-first" presentation. The market is looking for three specific catalysts:
2. FSD Monetization: Insights into the transition to a $99/month subscription-only model (effective February 2026) and progress on regulatory approvals in China and Europe.
3. Robotaxi/Cybercab: Concrete production timelines for Q2 2026 and updates on "unsupervised" testing in Austin and the Bay Area.
4. Optimus: Validation of the "Gen 3" robot and updates on the goal of deploying thousands of internal units by late 2026.
The Lesson from 2025
The overarching takeaway from the fiscal year is that Tesla has transitioned into a SaaS/Robotics narrative supported by a commodity-scale automaker. While the Energy segment remains a high-growth bright spot (hitting a record 14.2 GWh deployment in Q4), it cannot yet carry the valuation alone.
For the stock to maintain its premium, Musk must prove that the "valuation gap" will be filled by autonomous software and robotics revenue rather than just selling more Model Ys.
Appreciate if you could share your thoughts in the comment section whether a long straddle play would be appropriate to navigate the post TSLA earnings swing.
@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire @MillionaireTiger appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.
Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.
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