Tesla, Inc. (TSLA) traded up 5.54% on Nov. 9, 2026, the day Sargasso Capital Management published a report urging Tesla and SpaceX to combine in an all-stock deal. Sargasso holds small positions in both companies, and its report is commentary, not a deal offer. Figures below are current as of Nov. 9, 2026 and cover the third quarter ended Sept. 30, 2026, unless stated otherwise.
Key facts
- Nov. 9, 2026: Tesla shares were at $378.05, up 5.54% on the latest quote. The 52-week range is $297.38 to $498.83. Market cap is $1.49T.
- Nov. 9, 2026: Sargasso's report proposes an all-stock combination at market prices with no premium, with Tesla as the surviving company and a separate vote for outside Tesla shareholders, according to its release.
- Q3 FY2026 (ended Sept. 30, 2026): Revenue was $28.05B, slightly lower than a year earlier (-0.2%). Net income was $787.0M, down 42.7% from the year-ago quarter.
- Oct. 21, 2026: Tesla reported earnings per share of $0.48 against an analyst estimate of $0.455. Revenue of $28.05B was in line with the estimate of $28.06B. The $0.48 is the figure compared with analyst estimates; it differs from diluted EPS of $0.22 in the table below.
- Q3 FY2026 cash: Free cash flow was $1.53B. Cash and short-term investments were $45.45B against total debt of $16.45B.
- Next earnings: Jan. 27, 2027. The analyst EPS estimate is $0.51 and the revenue estimate is $28.64B.
| Metric | Q3 FY2026 | Q3 FY2025 (year-ago) |
|---|---|---|
| Revenue | $28.05B | $28.09B |
| Operating income | $718.0M | $1.62B |
| Net income | $787.0M | $1.37B |
| Diluted EPS (per share) | $0.22 | $0.39 |
| Free cash flow | $1.53B | $3.99B |
| Automotive revenue | $20.56B | $21.20B |
| Services and other revenue | $4.61B | $3.48B |
What happened
On Nov. 9, 2026, Sargasso Capital Management, a New York investment firm led by Patrick Feeley, released a report titled "Project Kepler: The Case for Combining Tesla and SpaceX." The report is addressed to special committees that, according to Sargasso, each company has formed to study a combination. Sargasso argues that Tesla and SpaceX already work together on chips, energy storage and connectivity. In its view, a single owner could direct money across those shared projects faster than two separate companies can. It proposes that Tesla be the surviving company and that outside Tesla shareholders get their own vote.
Sargasso discloses that it holds small positions in both companies and may change them at any time. Its report is not a decision by either company. Our data could not confirm the status or terms of the special committees Sargasso describes. Other coverage on the same day included a Motley Fool article citing ARK Invest's view linking Tesla's robotaxi cash flow to SpaceX's AI plans, and a report that Elon Musk said Tesla would refund many Cybertruck orders. We have not verified either item.
The stock's move came on a day with several stories at once, so we cannot attribute the 5.54% gain to the Sargasso report alone.
Why it matters for investors
Any combination would be priced against what Tesla earns today. Tesla's most recent quarter shows a company with steady sales and thinner profits.
Sales were flat and profit fell. Revenue of $28.05B in the third quarter ended Sept. 30, 2026 was about level with the year-ago quarter. Operating income, which is profit from running the business before interest and taxes, was $718.0M, against $1.62B a year earlier. Automotive revenue of $20.56B was lower than the year-ago $21.20B. Services and other revenue rose to $4.61B from $3.48B. Energy generation and storage revenue was lower than a year earlier. By region, the United States contributed $12.49B, China $5.21B and other countries $10.34B.
Margins have recovered but remain thin. Over the last five quarters, gross margin (the share of sales left after the direct costs of making the product) moved from 18.0% in the third quarter of 2025 to 20.1%, 21.1%, 16.8% and then 19.6% in the latest quarter. Operating margin fell from 5.8% a year ago to 4.2% in the first quarter of 2026 and 1.4% in the second quarter, before improving to 2.6% in the third quarter. Gross margin recovered in the latest quarter, but spending below the gross profit line still takes much of it.
Cash flow is uneven because spending is heavy. Free cash flow, which is cash from operations minus capital spending, was $1.53B in the third quarter of 2026. It was negative $1.09B in the second quarter, when capital expenditure of $5.79B outran operating cash flow of $4.70B. A year earlier it was $3.99B. In the latest quarter operating cash flow was $6.26B and capital spending was $4.73B. Tesla paid no buybacks in any of the last five quarters.
The balance sheet is strong. Cash and short-term investments of $45.45B exceed total debt of $16.45B. Separately, FMP reports net debt of negative $1.41B, which appears to use a narrower cash definition. Debt-to-equity is 0.18. The Piotroski score, a 0-to-9 gauge of financial health, is 6, and the Altman Z score, a bankruptcy-risk gauge where higher is safer, is 14.60.
Valuation is the outlier. On trailing 12-month figures, Tesla trades at a price-to-earnings ratio of 381.87, price-to-sales of 14.43 and price-to-free-cash-flow of 452.42. Its net margin is 3.1%. Peers look different:
| Company | Market cap | P/E | Net margin |
|---|---|---|---|
| Tesla (TSLA) | $1.49T | 381.87 | 3.1% |
| BYD (BYDDY) | $83.60B | 24.22 | 3.9% |
| General Motors (GM) | $76.11B | 20.28 | 2.1% |
| Ford (F) | $50.02B | -6.39 | -4.2% |
| Lucid (LCID) | $1.14B | -0.27 | -324.9% |
Tesla's net margin sits between BYD's and GM's, but its valuation is far higher than either. The market is pricing future businesses, not current car profits. That is the context for a merger proposal built on shared AI, chip and energy projects.
Analysts are split. The consensus rating is "Buy," with 35 buy ratings, 34 holds and 14 sells among 83 total. The average analyst price target is $442.59, the median is $442.00, and targets range from a low of $157.00 to a high of $840.00. On Oct. 26, 2026, Barclays upgraded Tesla from Equal Weight to Overweight. GLJ Research kept its Sell rating on Nov. 5, 2026. FMP's discounted cash flow model, an automated estimate of what future cash flows are worth today, gives $18.62 per share. Models like that are sensitive to their assumptions, and the gap to the market price shows how much of Tesla's value rests on growth not yet in the numbers.
Our MoonshotScore. Stock Expert AI's MoonshotScore V2 rates Tesla 55.2, labeled "Fair." Its sector-relative pillars are safety 90, momentum 56, growth 45, quality 41 and valuation 9. In plain terms, the balance sheet scores well, price momentum is middling, and the valuation pillar is very weak against the sector.
What could go wrong
- A deal may never happen. Sargasso is a small shareholder, and its report is not binding on either company.
- Terms matter. Sargasso proposes no premium. Shareholders on either side could object to the terms or to how the two companies are valued.
- Profits are thin. Operating margin was 2.6% in the latest quarter, lower than the 5.8% a year ago.
- Spending is heavy. Capital expenditure absorbed most of operating cash flow in the last two quarters.
- Valuation leaves little room. A trailing P/E of 381.87 means expectations are high.
- Insider activity is quiet. Among recent Form 4 insider filings, we found 0 open-market purchases and 1 sale in the last 90 days, though older filings may be missing.
What to watch next
- Any statement from Tesla's or SpaceX's special committees on a combination.
- Tesla's next earnings report on Jan. 27, 2027, where analysts estimate EPS of $0.51 and revenue of $28.64B.
- Whether gross margin holds near the latest 19.6% and operating margin improves from 2.6%.
- Whether free cash flow stays positive as capital spending continues.
- Updates on the Cybertruck refund comments reported on Nov. 9, 2026.
Frequently asked questions
Q: Why did Tesla stock go up on November 9, 2026?
Tesla shares were up 5.54% to $378.05 on the latest quote on Nov. 9, 2026. Several stories ran that day, including Sargasso Capital Management's report urging a Tesla and SpaceX combination, a Motley Fool article citing ARK Invest and reported comments from Elon Musk on Cybertruck refunds. We cannot say which one drove the move.
Q: Are Tesla and SpaceX merging?
No merger has been announced as of Nov. 9, 2026. Sargasso Capital Management, which holds small positions in both companies, published a report proposing an all-stock combination with no premium. According to that report, each company has formed a special committee to study a combination. Our data could not verify the status of those committees.
Q: How did Tesla do in the third quarter of 2026?
In the quarter ended Sept. 30, 2026, Tesla reported revenue of $28.05B, about level with the year-ago quarter, and net income of $787.0M, down from $1.37B. Earnings per share of $0.48, the figure compared with analyst estimates and different from diluted EPS of $0.22, beat the analyst estimate of $0.455, while revenue was in line with the estimate of $28.06B. Free cash flow was $1.53B.
What our data could not verify
We could not verify the status of any Tesla or SpaceX committee, the terms of any deal, or the cause of the Nov. 9, 2026 price move. Sargasso's proposal is its own view. We did not review the full report.
Sources: Stock Expert AI data (MoonshotScore) and Financial Modeling Prep (FMP) financial data for prices, financials, estimates, ratings and peers, as of Nov. 9, 2026. Third-party reports: Sargasso Capital Management press release (GlobeNewswire, Nov. 9, 2026), a Motley Fool article citing ARK Invest (fool.com), a Cybertruck refund report (247wallst.com) and news headlines from Nov. 9, 2026, used for context only.
This is educational content, not investment advice. Past performance does not guarantee future results.