Tesla Stock Holds Steady Ahead of Earnings, Outperforms Auto Sector

Tesla Stock Holds Steady Ahead of Earnings, Outperforms Auto Sector

In the latest trading session, Tesla (TSLA) closed at $182.58, reflecting a slight decline of 0.23% from the previous day. This performance was better than the S&P 500, which dropped by 0.31%, while the Dow saw an increase of 0.67%, and the tech-heavy Nasdaq fell by 1.09%.

Over the past month, Tesla stock has risen by 2.1%, outperforming the Auto-Tires-Trucks sector, which declined by 4.91%. However, it underperformed the S&P 500, which gained 2.73%.

Investors are closely watching Tesla’s upcoming earnings report. The company is expected to post an EPS of $0.60, a decrease of 34.07% from the same quarter last year. Revenue is anticipated to be $24.91 billion, a slight decrease of 0.08% from the previous year.

For the entire fiscal year, Zacks Consensus Estimates forecast earnings of $2.47 per share and revenue of $98.56 billion, representing changes of -20.83% and +1.85%, respectively, from the previous year.

Recent analyst estimate revisions for Tesla highlight the dynamic nature of near-term business trends. Positive changes in these estimates reflect a favorable outlook on Tesla’s business health and profitability.

Our research indicates that estimate changes are closely linked to near-term stock prices. To capitalize on this, we utilize the Zacks Rank, a proprietary model that incorporates these estimate changes and provides a useful rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), has a strong track record of outperformance, with #1 stocks yielding an average annual return of +25% since 1988. Currently, Tesla holds a Zacks Rank of #3 (Hold), with the Consensus EPS estimate down by 1.06% over the past month.

In terms of valuation, Tesla has a Forward P/E ratio of 74.22, significantly higher than the industry average of 12.67, indicating that Tesla trades at a premium. Additionally, Tesla’s PEG ratio stands at 3.43, factoring in expected earnings growth. The Automotive – Domestic industry, by comparison, had an average PEG ratio of 1.36 as of yesterday’s close.

The Automotive – Domestic industry is part of the Auto-Tires-Trucks sector and holds a Zacks Industry Rank of 34, placing it in the top 14% of over 250 industries.

The Zacks Industry Rank measures the strength of specific industry groups by calculating the average Zacks Rank of the stocks within those groups. Our research shows that industries in the top 50% outperform those in the bottom 50% by a 2 to 1 margin.