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

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Tesla (TSLA) closed at $650.28 in the latest trading session, marking a +1.72% move from the prior day. This move outpaced the S&P 500's daily gain of 0.22%. Meanwhile, the Dow lost 0.13%, and the Nasdaq, a tech-heavy index, added 0.2%.

Heading into today, shares of the electric car maker had lost 9.88% over the past month, lagging the Auto-Tires-Trucks sector's loss of 7.74% and the S&P 500's loss of 8.32% in that time.

Tesla will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $2.07, up 42.76% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $18.59 billion, up 55.46% from the year-ago period.

TSLA's full-year Zacks Consensus Estimates are calling for earnings of $11.18 per share and revenue of $85.77 billion. These results would represent year-over-year changes of +64.9% and +59.36%, respectively.

Any recent changes to analyst estimates for Tesla should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

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.

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 0.88% lower within the past month. Tesla currently has a Zacks Rank of #3 (Hold).

Digging into valuation, Tesla currently has a Forward P/E ratio of 57.2. This valuation marks a premium compared to its industry's average Forward P/E of 10.45.

Investors should also note that TSLA has a PEG ratio of 1.91 right now. 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. The Automotive - Domestic industry currently had an average PEG ratio of 0.98 as of yesterday's close.

The Automotive - Domestic industry is part of the Auto-Tires-Trucks sector. This industry currently has a Zacks Industry Rank of 163, which puts it in the bottom 36% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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