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

Zacks Equity Research

Tesla (TSLA) closed at $982.13 in the latest trading session, marking a -0.89% move from the prior day. This move lagged the S&P 500's daily gain of 1.9%. At the same time, the Dow added 2.05%, and the tech-heavy Nasdaq gained 1.75%.

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. Our most recent consensus estimate is calling for quarterly revenue of $4.67 billion, down 26.38% from the year-ago period.

TSLA's full-year Zacks Consensus Estimates are calling for earnings of $4.59 per share and revenue of $26.85 billion. These results would represent year-over-year changes of +3430.77% and +9.23%, respectively.

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. 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.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. TSLA currently has a Zacks Rank of #1 (Strong Buy).

In terms of valuation, TSLA is currently trading at a Forward P/E ratio of 215.94. For comparison, its industry has an average Forward P/E of 26.75, which means TSLA is trading at a premium to the group.

Investors should also note that TSLA has a PEG ratio of 5.39 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 was holding an average PEG ratio of 2.97 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 59, putting it in the top 24% 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.

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

Click to get this free report Tesla, Inc. (TSLA) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research