Tesla or Ford: Which Stock is Worth Buying Ahead of Q4 Earnings?

As the fourth-quarter 2025 earnings season begins for the auto sector, investors are closely watching U.S. auto giants Tesla TSLA and Ford F to determine which stock is better positioned ahead of results. Tesla is scheduled to report earnings tomorrow, while Ford will release its quarterly results on Feb. 10.

Q4 Earnings Whispers for TSLA & F

The Zacks Consensus Estimate for TSLA’s to-be-reported quarter’s earnings and revenues is pegged at 45 cents per share and $25.1 billion, respectively. In the trailing four quarters, the company missed EPS estimates on three occasions and beat on the other, with the average negative earnings surprise being 11.1%.

The consensus mark for F’s EPS and automotive revenues is 17 cents and $41 billion, respectively. Ford’s earnings surprise history is solid. In the past four quarters, the company beat the estimates each time.

While our proprietary model predicts an earnings beat for Ford, it does not conclusively predict one for Tesla.

The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Tesla carries a Zacks Rank #4 (Sell) and has an Earnings ESP of +1.11%.

Ford has an Earnings ESP of +10.85% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors to Shape Tesla & Ford’s Upcoming Results

In the fourth quarter of 2025, Tesla sold 418,227 vehicles (comprising 406,585 Model 3/Y and 11,642 other models), down 16% from the corresponding quarter of 2024. The deliveries also lagged our model estimate of 448,384 units. Withdrawal of the $7,500 federal EV tax credit and intense competition from Chinese EV makers weighed on Tesla’s sales in the fourth quarter of 2025.

In the fourth quarter of 2025, Ford sales rose 2.7% to over 545,200 vehicles, while market share improved 0.9% in the fourth quarter of 2025, driven by high demand for hybrids. Hybrid sales grew 17.6% year over year to 55,374 units. Higher year-over-year deliveries of trucks and Mustang cars boosted overall volumes. Nonetheless, the company expects around $19.5 billion in special charges, mostly in the fourth quarter, as it restructures its U.S. EV strategy. Importantly, about $5.5 billion of this will hit cash flows, mainly through 2026 and 2027.

Why Ford Still Appears a Solid Bet Now

Ford was the third-largest automaker in the United States in 2025 by sales volumes. Ford’s U.S. vehicle sales rose 6% year over year to 2.2 million vehicles in 2025, marking its best annual U.S. sales performance since 2019. Its hybrid strategy adds resilience amid weak EV sales. Ford is now leaning more toward hybrids, gas-powered vehicles, and smaller, affordable EVs amid slower e-mobility adoption.

By scaling back its EV plans that no longer match demand, Ford is basically shifting resources toward higher-margin vehicles and proven revenue drivers. While this will impact near-term financials as the company restructures its U.S. EV assets, the pivot is crucial for capital efficiency and future profitability.

Additionally, continued strength in the Ford Pro unit, strategic initiatives in autonomy, AI integration, and entry into battery energy storage broaden long-term growth avenues while supporting margin improvement. Strong liquidity and an appealing dividend yield further enhance shareholder value.

The Zacks Consensus Estimate for Ford’s 2026 EPS has moved up 6 cents over the past seven days to $1.54, implying 36% growth from the projected 2025 levels.

Why Buying TSLA Stock Doesn’t Make Sense Now

Tesla’s delivery slowdown underscores the rising pressure on its core EV business. Weak fourth-quarter deliveries dragged down total sales in 2025, marking the second consecutive year of declining volumes. A more concerning aspect is that the pace of the slowdown has accelerated. Deliveries slipped just 1% year over year in 2024, but the decline widened to more than 8% in 2025. A softer EV market, intensifying competition and an aging vehicle lineup have all weighed on demand.

Against this backdrop, CEO Elon Musk is increasingly shifting focus toward autonomous driving and artificial intelligence, positioning them as Tesla’s next major growth drivers. However, these initiatives are unlikely to generate meaningful revenues in the near term. Tesla also faces significant ground to cover in robotaxis, where Waymo currently holds a clear lead. Expanding robotaxi services beyond limited pilots and turning AI-focused projects into steady revenue streams will take time, keeping near-term execution risks elevated.

While the Zacks Consensus Estimate for Tesla’s 2026 EPS implies year-over-year growth, it has declined by 10 cents over the past 30 days, indicating rising analyst pessimism.

F & TSLA: Valuation Check

From a valuation standpoint, Ford stands out as significantly cheaper, trading at 0.31x forward sales. Meanwhile, Tesla’s valuation remains stretched, reflected in a forward sales multiple of 13.67x.

Conclusion

Heading into fourth-quarter earnings, the risk-reward setup appears skewed in Ford’s favor. Strong earnings momentum, improving sales trends and a disciplined pivot toward hybrids support near-term confidence, even as restructuring charges weigh on cash flows. Ford’s attractive valuation, positive earnings revisions and solid dividend further strengthen its investment case.

In contrast, Tesla faces rising pressure from slowing deliveries, intensifying competition, and an uncertain demand environment, while its longer-term bets on autonomy and AI remain years away from meaningful monetization. With valuation still stretched and analyst sentiment weakening, Ford looks like the more compelling stock to own ahead of earnings.

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This article originally published on Zacks Investment Research (zacks.com).

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