Stock Performance and Earnings Projections
Investors have kept a close eye on Tesla Inc (TSLA), as it has found itself in the limelight of the most-searched stocks on Zacks.com. The company has shown a commendable return of +10.4% over the last month, overshadowing the Zacks S&P 500 composite’s +3.5% change. Tesla, belonging to the Zacks Automotive – Domestic industry, has seen a surge of 9.4% during this period. The burning question remains – what lies ahead for this electric car manufacturer?
While stock trends may shift abruptly due to media reports or hearsay about a company’s business outlook, the crucial driving force behind long-term investment decisions always boils down to fundamental factors.
Earnings Estimate Revisions
Zacks places a heavy emphasis on examining a company’s earnings forecast revisions, as it believes a stock’s fair value is determined by the future stream of earnings it is poised to generate. The pulse of our evaluation lies in monitoring how sell-side analysts adjust their earnings predictions in response to changing business dynamics. A surge in earnings estimates tends to heighten a stock’s fair value, ultimately nudging investors to buy the stock, thereby boosting its price. Studies have consistently shown a strong correlation between earnings estimate revisions and short-term stock price movements.
Tesla is forecasted to post earnings of $0.60 per share for the current quarter, reflecting a year-over-year variation of -34.1%. Over the last 30 days, the Zacks Consensus Estimate has undergone a -0.8% transformation.
For the ongoing fiscal year, the consensus earnings estimate of $2.46 indicates a -21.2% change from the previous year, with a recent alteration of -1.1% within the last month.
Looking ahead to the next fiscal year, the consensus earnings estimate of $3.33 suggests a significant uptick of +35.4% compared to the previous year, with a recent shift of +3%.
Revenue Growth Projections
While earnings growth mirrors a company’s financial health, the ability to amplify its revenues holds equal importance. Sustainable earnings growth rarely materializes without a simultaneous uptick in revenue. For Tesla, the consensus sales estimate of $24.9 billion for the current quarter indicates a marginal year-over-year decrease of -0.1%. Estimates for the current and next fiscal years stand at $98.24 billion (change of +1.5%) and $113.03 billion (change of +15.1%), respectively.
Performance and Valuation Metrics
The Yardstick of a stock’s valuation is indispensable in making informed investment decisions. Conducting a comparative analysis of a company’s valuation multiples such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF) against its historical records unveils the intrinsic value and growth prospects. Evaluating a company relative to its peers based on these metrics offers insights into the stock’s pricing rationale.
Based on the Zacks Value Style Score, Tesla grabs an F grade, indicating a premium trading scenario compared to its peers. A detailed perusal into the valuation metrics propelling this grade can be viewed here.
Final Verdict
The discerning insights shared alongside other pertinent details on Zacks.com offer a comprehensive understanding of the market buzz encircling Tesla. Despite these nuances, the Zacks Rank #3 implies Tesla will likely navigate in tandem with the broader market dynamics in the near future.
