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

Zacks Equity Research

Tesla (TSLA) closed the most recent trading day at $572.20, moving +0.46% from the previous trading session. The stock outpaced the S&P 500's daily gain of 0.11%. At the same time, the Dow lost 0.09%, and the tech-heavy Nasdaq gained 0.2%.

Prior to today's trading, shares of the electric car maker had gained 33.94% over the past month. This has outpaced the Auto-Tires-Trucks sector's gain of 2.09% and the S&P 500's gain of 3.25% in that time.

Wall Street will be looking for positivity from TSLA as it approaches its next earnings report date. This is expected to be January 29, 2020. In that report, analysts expect TSLA to post earnings of $1.62 per share. This would mark a year-over-year decline of 16.06%. Meanwhile, our latest consensus estimate is calling for revenue of $7.05 billion, down 2.48% from the prior-year quarter.

Any recent changes to analyst estimates for TSLA should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 1.9% higher within the past month. TSLA is currently sporting a Zacks Rank of #2 (Buy).

Investors should also note TSLA's current valuation metrics, including its Forward P/E ratio of 89.64. For comparison, its industry has an average Forward P/E of 11.98, which means TSLA is trading at a premium to the group.

Meanwhile, TSLA's PEG ratio is currently 1.93. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Automotive - Domestic stocks are, on average, holding a PEG ratio of 1.37 based on yesterday's closing prices.

The Automotive - Domestic industry is part of the Auto-Tires-Trucks sector. This industry currently has a Zacks Industry Rank of 69, which puts it in the top 28% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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