QSQuantSignals Research/Scion Template
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QS Research · Michael Burry's Scion Capital analyst template · 2006

Tesla, Inc. (TSLA)

As of 2026-11-02 · 12/15 boxes filled from SEC filings and market data

Conclusion: SHORT

Conviction medium · base case -81% · downside -93% · upside 0%

Using the required secular TTM base to Sep 30, 2026, Tesla generates $103.57B revenue, $3.47B operating income, $3.22B net income, and $3.30B free cash flow, yet the market pays $1,627.39B, or 15.36x EV/Sales, 174.2x EV/EBITDA, 505.4x P/E, and a 0.2% FCF yield. Even granting the highest named-competitor EV/Sales multiple (RIVN 2.58x) yields only $76.76/share (-81.4%), and the lowest profitable peer P/E (ENPH 37.4x) yields $30.47/share (-92.6%); the current $411.71 equals simply keeping Tesla's own premium multiple, so it is the upside case. Operating income has fallen from $13.66B in FY2022 to $4.36B in FY2025 while R&D surged 69% in Q3 2026 and share count rose 24.3% over three years, suggesting the deterioration is structural rather than temporary. The risk/reward is heavily skewed to the downside, and the short is supported because the base case is far below -30% and the upside case is no better than flat.

Key numbers

The 15 boxes

  1. ✓ 1. Long-form business notes

    Tesla operates two reportable segments: automotive and energy generation and storage. Between the FY2020 and FY2025 10-Ks, Tesla added the Cybertruck, Tesla Semi, Robotaxi service, a new residential solar panel, and expanded manufacturing and vertical integration. For FY2025, revenue was $94.83B, operating income $4.36B, and operating cash flow $14.75B.

  2. ✓ 2. Competitive advantage

    Tesla's automotive segment faces intense and growing competition, with many competitors holding more resources; operating income fell from $13.66B in FY2022 to $4.36B in FY2025, and gross profit from $20.85B to $17.09B, indicating no clear durable cost or pricing advantage. The company claims advantages in energy storage (brand, modular/scalable design), energy generation (aesthetics, integration), and human capital, but these are self-reported and not supported by margin/return data. Overall, the sources do not establish a durable competitive moat in the core automotive business.

  3. ✓ 3. 10-Q takeaways

    Tesla's Q3 2026 revenue was essentially flat at $28.05B, while 9M 2026 revenue grew 13% to $78.67B; net income fell to $787M in Q3. Automotive gross margin improved to 18.5% and total gross margin to 19.6%, but R&D and SG&A surged on SI/Optimus and CEO-award stock comp. Cash and short-term investments ended at $45.45B, operating cash flow was $14.9B YTD, and 2026 capex is guided to exceed $20B. Tariffs/OBBBA and regulatory-credit restrictions are cited as key risks, with energy storage relatively more exposed.

  4. ✓ 4. Corporate governance
  5. ✓ 5. Overview of the prior 3 years of 8-K filings
  6. ✓ 6. Other significant filings
  7. ✓ 7. Chronology of significant news and events
  8. ✓ 8. Comparables valuation interpretation
  9. ✓ 9. Insider trading interpretation
  10. ○ 10. Earnings-call notes
  11. ○ 11. Impression of the shareholder letter
  12. ○ 12. Scuttlebutt overview
  13. ✓ 13. Valuation and risk/reward summary
  14. ✓ 14. Current price suppression and potential catalysts

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