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Tesla (TSLA) Gains But Lags Market: What You Should Know

Zacks Equity Research

Tesla (TSLA) closed at $882.96 in the latest trading session, marking a +0.16% move from the prior day. This change lagged the S&P 500's 1.37% gain on the day. Meanwhile, the Dow gained 2.05%, and the Nasdaq, a tech-heavy index, added 0.78%.

TSLA will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of -$1.03, up 8.04% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $4.67 billion, down 26.38% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.59 per share and revenue of $26.85 billion. These totals would mark changes of +3430.77% and +9.23%, respectively, from last year.

Any recent changes to analyst estimates for TSLA should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 95.15% higher. TSLA is currently a Zacks Rank #2 (Buy).

Digging into valuation, TSLA currently has a Forward P/E ratio of 192.11. This valuation marks a premium compared to its industry's average Forward P/E of 25.76.

Investors should also note that TSLA has a PEG ratio of 4.8 right now. 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 2.6 at yesterday's closing price.

The Automotive - Domestic industry is part of the Auto-Tires-Trucks sector. This group has a Zacks Industry Rank of 208, putting it in the bottom 19% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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