Tesla (TSLA) closed the latest trading session at $254.27, marking a 1.71% increase from the previous day. This performance outpaced the S&P 500’s daily gain of 0.25%, the Dow’s rise of 0.2%, and the Nasdaq’s increase of 0.56%. Over the past month, Tesla shares have surged by 17.25%, exceeding the Auto-Tires-Trucks sector’s gain of 6% and the S&P 500’s gain of 1.65%.
Investors are eagerly awaiting Tesla’s upcoming earnings disclosure. Analysts predict that the company will report earnings per share (EPS) of $0.58, which represents a 12.12% decrease from the prior-year quarter. However, the consensus estimate for revenue is $25.73 billion, representing a 10.18% increase from the prior-year quarter. Looking at the entire fiscal year, analysts anticipate earnings of $2.27 per share and revenue of $98.9 billion, indicating changes of -27.24% and +2.19%, respectively, from the previous year.
Recent changes to analyst estimates for Tesla offer valuable insights into the changing landscape of near-term business trends. Positive revisions in estimates generally signify analysts’ confidence in the company’s business performance and profit potential. Empirical research suggests that these revisions are directly correlated with impending stock price performance.
To leverage this correlation, the Zacks Rank system was developed. This unique model incorporates estimate changes and provides a practical rating system. The Zacks Rank, ranging from #1 (Strong Buy) to #5 (Strong Sell), has a proven track record of outperforming. Since 1988, #1 stocks have returned an average annual gain of +25%. Over the past 30 days, the consensus EPS projection for Tesla has remained stagnant. Currently, Tesla holds a Zacks Rank of #3 (Hold).
In terms of valuation, Tesla is currently trading at a Forward P/E ratio of 110.13. This valuation represents a premium compared to its industry’s average Forward P/E of 14.04. Additionally, Tesla’s PEG ratio stands at 5.24. The PEG ratio, similar to the P/E ratio, incorporates the company’s expected earnings growth rate. By the end of yesterday’s trading, the Automotive – Domestic industry had an average PEG ratio of 1.47. The Automotive – Domestic industry is part of the Auto-Tires-Trucks sector. This group holds a Zacks Industry Rank of 168, placing it in the bottom 34% of all 250+ industries. The Zacks Industry Rank assesses the strength of specific industry groups by calculating the average Zacks Rank of the individual stocks within each group. Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
