Tesla Laps the Stock Market: Here’s Why

Tesla Laps the Stock Market: Here’s Why

The most recent trading session ended with Tesla (TSLA) standing at $252.94, reflecting a +0.56% shift from the previouse trading day’s closing. This change outpaced the S&P 500’s 0.1% gain on the day. Elsewhere, the Dow lost 0.08%, while the tech-heavy Nasdaq added 0.28%.

Shares of the electric car maker have appreciated by 41.72% over the course of the past month, outperforming the Auto-Tires-Trucks sector’s gain of 16.17% and the S&P 500’s gain of 4.08%.

Investors will be eagerly watching for the performance of Tesla in its upcoming earnings disclosure. The company’s earnings report is set to be unveiled on July 23, 2024. The company is predicted to post an EPS of $0.62, indicating a 31.87% decline compared to the equivalent quarter last year. Our most recent consensus estimate is calling for quarterly revenue of $24.9 billion, down 0.12% from the year-ago period.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $2.48 per share and a revenue of $98.24 billion, representing changes of -20.51% and +1.51%, respectively, from the prior year.

It’s also important for investors to be aware of any recent modifications to analyst estimates for Tesla. Recent revisions tend to reflect the latest near-term business trends. Therefore, positive revisions in estimates convey analysts’ confidence in the company’s business performance and profit potential.

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.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.03% downward. Right now, Tesla possesses a Zacks Rank of #3 (Hold).

Looking at valuation, Tesla is presently trading at a Forward P/E ratio of 101.45. This denotes a premium relative to the industry’s average Forward P/E of 12.02.

It’s also important to note that TSLA currently trades at a PEG ratio of 4.69. 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 1.12 based on yesterday’s closing prices.

The Automotive – Domestic industry is part of the Auto-Tires-Trucks sector. This group has a Zacks Industry Rank of 72, putting it in the top 29% 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.

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