The Current Landscape
Given the recent market volatility, the focus on Tesla, Inc. (TSLA) by Zacks.com visitors has intensified. As investors navigate through the choppy waters, a closer look at the factors influencing Tesla’s near-term performance becomes imperative.
Over the past month, Tesla’s stock has experienced a dip of -1.5%, contrasting the broader Zacks S&P 500 composite’s +1.3% change. Contextually, the Zacks Automotive – Domestic sector, where Tesla resides, has exhibited a bearish trend with a 2.6% loss. The pivotal question emerges: What trajectory will the stock take in the immediate future?
Evaluating Earnings Revisions
Zacks places paramount importance on the evolution of a company’s future earnings projections, as it fundamentally influences a stock’s valuation. Earnings projections serve as a compass, steering investment decisions based on the anticipated value of future earnings streams.
For the current quarter, Tesla is forecasted to achieve earnings of $0.60 per share, showcasing a -34.1% deviation from the year-ago quarter. The Zacks Consensus Estimate has marginally shifted by -2.2% over the recent 30-day span.
Anticipated earnings of $2.47 per share for the ongoing fiscal year signify a -20.8% year-over-year shift. This estimate has been nudged down by -4.7% in the last month.
The subsequent fiscal year proposes an earnings estimate of $3.24, reflecting a promising +31% growth compared to the previous year. However, there has been a recent negative adjustment of -8.6% in this projection.
Projected Revenue Trajectory
While earnings growth defines a company’s financial vigor, revenue upticks are equally pivotal. Sustainable growth in earnings is incumbent on revenue expansion. Accurately predicting a company’s revenue trajectory holds the key to investment soundness.
For Tesla, the consensus sales projection for the current quarter stands at $24.9 billion, signaling a marginal year-over-year decrease of -0.1%. Projections for the current and upcoming fiscal years mark $99 billion and $112.7 billion, translating to +2.3% and +13.8% upticks, respectively.
Performance Overview and Historical Data
In its recent quarter, Tesla reported revenues of $21.3 billion, registering an -8.7% annual shift. Earnings per share (EPS) painted a similar picture, with $0.45 for the current period compared to $0.85 a year ago.
Comparing against the Zacks Consensus Estimate of $22.15 billion, Tesla’s reported revenue showcased a -3.83% variance. The EPS surprise was -2.17%. Over the preceding year, Tesla surpassed EPS estimates once, aligning with consensus revenue estimates on one occasion.
Valuation Insights
No investment decision is holistic without probing into a stock’s valuation. Scrutinizing a stock’s valuation metrics, encompassing price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF) ratios, unveils its intrinsic worth and growth potential.
The Zacks Value Style Score, a holistic grading system, positions Tesla at an F grade, as it trades at a premium compared to its competitors. This assessment offers a lens into Tesla’s valuation dynamics vis-a-vis industry peers.
Concluding Remarks
The mosaic of insights presented here, coupled with additional data on Zacks.com, bears significance in evaluating the buzz around Tesla. Beneath the surface, the Zacks Rank #4 hints at Tesla’s potential to underperform the broader market in the foreseeable future.
