It's been a rough 2025 for Tesla (TSLA -4.97%). Unfavorable macroeconomic conditions, such as the Trump Administration's tariffs, the divisive actions of CEO Elon Musk, and critically, falling quarterly sales, hit the automaker, hurting business performance.
But Tesla appears to be bouncing back. On Oct. 2, the company reported a record-breaking number of vehicle deliveries in the third quarter. Given this exciting news, Tesla stock may be worth picking up before the company's Q3 earnings report is released on Oct. 22.
However, some key considerations suggest it's best to wait. Here's a deeper dive into whether now is the time to buy.
Deciding on Tesla stock ahead of its Q3 earnings release
Tesla's challenging 2025 led to Q2 sales of $22.5 billion, a 12% year-over-year drop from 2024. This was due primarily to a decline in vehicle sales, with Q2 total deliveries falling 13% year over year to about 384,000.
After that disappointing outcome, Q3 deliveries came in at over 497,000. The record-setting performance handily beat Wall Street expectations.
But the car sales boost could simply be due to consumers taking advantage of a beefy $7,500 federal tax credit before it disappears at the end of 2025. If so, demand could plummet in 2026.
Another factor to consider is Tesla's share price valuation. Here's a look at the stock's price-to-earnings (P/E) ratio.
Data by YCharts.
The chart shows Tesla's P/E multiple in October is higher than it's been all year. This suggests the electric vehicle (EV) manufacturer's stock is quite pricey right now.
That said, shares could surge in Q4 as consumers rush to take advantage of expiring tax credits. Beyond that, the EV environment appears fuzzy with no clear visibility on the overall industry's growth prospects.
The combination of an elevated valuation and a potential sales plunge next year makes now a risky time to buy Tesla stock.
