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Tesla (TSLA) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

In the latest trading session, Tesla (TSLA) closed at $805.81, marking a -1.76% move from the previous day. This change lagged the S&P 500's daily loss of 0.21%. Meanwhile, the Dow lost 0.58%, and the Nasdaq, a tech-heavy index, lost 0.46%.

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.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.59 per share and revenue of $26.85 billion, which would represent changes of +3430.77% and +9.23%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for TSLA. 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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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. Within the past 30 days, our consensus EPS projection has moved 99.31% higher. TSLA is currently sporting a Zacks Rank of #2 (Buy).

Digging into valuation, TSLA currently has a Forward P/E ratio of 178.75. This represents a premium compared to its industry's average Forward P/E of 26.28.

Also, we should mention that TSLA has a PEG ratio of 4.46. 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. Automotive - Domestic stocks are, on average, holding a PEG ratio of 2.82 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 234, which puts it in the bottom 8% 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.

To follow TSLA in the coming trading sessions, be sure to utilize Zacks.com.

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