Tesla (TSLA) Stock Sinks As Market Gains: What You Should Know

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Tesla (TSLA) closed the most recent trading day at $661.75, moving -0.93% from the previous trading session. This change lagged the S&P 500’s daily gain of 1.18%. Meanwhile, the Dow gained 0.52%, and the Nasdaq, a tech-heavy index, added 1.76%.

Coming into today, shares of the electric car maker had gained 2.26% in the past month. In that same time, the Auto-Tires-Trucks sector gained 0.64%, while the S&P 500 gained 4.55%.

TSLA will be looking to display strength as it nears its next earnings release. In that report, analysts expect TSLA to post earnings of $0.97 per share. This would mark year-over-year growth of 288%. Meanwhile, our latest consensus estimate is calling for revenue of $9.49 billion, up 58.52% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.10 per share and revenue of $47.35 billion. These totals would mark changes of +83.04% and +50.14%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for TSLA. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company’s business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 3.42% higher. TSLA currently has a Zacks Rank of #3 (Hold).

In terms of valuation, TSLA is currently trading at a Forward P/E ratio of 163.07. Its industry sports an average Forward P/E of 17.14, so we one might conclude that TSLA is trading at a premium comparatively.

It is also worth noting that TSLA currently has a PEG ratio of 4.73. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company’s expected earnings growth rate into account. The Automotive – Domestic was holding an average PEG ratio of 2.25 at yesterday’s closing price.

The Automotive – Domestic industry is part of the Auto-Tires-Trucks sector. This industry currently has a Zacks Industry Rank of 216, which puts it in the bottom 15% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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