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Tesla (TSLA - Free Report) has been on fire for the better part of the last year, but now the company is facing setbacks. After hitting an all-time high in late June, the stock has experienced a rare downturn, plummeting more than 15% this week alone.
Tesla recently missed second-quarter vehicle delivery estimates, and now analysts are starting to become more skeptical of the company’s future.
“We remain sell rated on shares of TSLA where we see potential for downside as the Model 3 launch curve undershoots the company's production targets and as 2H17 margins likely disappoint,” said Goldman Sachs analyst David Tamberrino (also read: Here's Why Tesla Stock Is Sinking).
Tesla currently holds a Zacks Rank #3 (Hold), as well as “F” grades for Value and Growth. Also, Tesla sports a horrific -42.97% projected EPS growth and a -15.08% RoE, both of which trail its industry averages. Tesla holds a net margin of -8.46%, which means that they are not even close to turning a profit. Finally, the company possesses an extremely high debt/capital of 56.50%, which means they are heavily relying on debt or liabilities to finance its future projects.
All of these metrics show that Tesla—a company that is often considered a darling “growth stock”—is facing limited growth prospects approaching earnings season. Luckily, there are plenty of other stocks that possess higher growth potential than Tesla.
The Progressive Corporation is an auto insurance company and a writer of auto insurance through various agents. Progressive constantly attempts to reward its shareholders with $192 million spent in 2016 to repurchase shares and a respectable 1.53% dividend. The company’s rates are extremely competitive in all its markets as it continues to gain from its expanded multi-product offering. Also, Progressive Corporation acquired a beta rating of 0.85, which means that it is considered less volatile than a typical security on the market.
Progressive Corporation features an astronomical projected EPS growth of 44.88% and projected sales growth of 13.06%, both of which tower of the industry averages of 9.18% and 1.12%, respectively. Furthermore, the company holds a strong current ratio of 0.45. This warrants that the firm does not heavily rely on debt to finance its projects, which creates a much healthier balance sheet consisting of a smaller amount of liabilities. The Progressive Corporation was recently promoted to a Zacks Rank #1 (Strong Buy).
Ferrari N.V. is engaged in designing, manufacturing and selling sports cars. Also, Ferrari has surpassed its earnings projections in each of the past five operational quarters by an average of 33.96%. Additionally, Ferrari possesses an “A” grade for Growth, which means that we project the company to continue to expand. Further, Ferrari’s net margin sits well above the industry average at 13.70%. In essence, Ferrari is retaining a larger amount of profit than its competitors, which can help fuel future growth.
Ferrari features a whopping RoE of 128.90% and current cash flow growth of 19.56%, both of which compare positively to the industry averages of 18.43% and 9.57%. The acclaimed car company holds a strong net margin of 13.70%, which beats the industry average of 4.24%. Basically, Ferrari is currently retaining a larger portion of its revenue than its competitors. Now might be the optimal time to purchase shares of Ferrari, which holds a Zacks Rank #1 (Strong Buy).
Michelin manufactures tires for all types of vehicles and publishes maps, as well as guides, for numerous digital services. As of 60 days ago, Michelin’s full-year EPS estimates increased by 10.50% to a respectable $2.00. Also, Michelin features “A” grades for Growth and Momentum. This means that the company is projected to expand, and its share price has continued to increase. Further, Michelin pays its shareholders a strong 2.08% dividend per share.
Michelin features a strong projected sales growth of 12.23% and cash flow per share of $3.79, both of which compare favorably to the industry averages of 4.46% and $3.21, respectively. Finally, the company holds a RoE of 15.44%, which beats the industry average of 13.83%. This means that Michelin is producing a higher turnover rate from shareholder equity to assets than its competitors. Michelin was recently promoted to a Zacks Rank #1 (Strong Buy).
4. Twitter, Inc.
Twitter is a public, real-time, global platform where any user can create a Tweet and follow other users throughout the platform. Acquisitions have been vital to Twitter’s growth trajectory as the company’s has acquired over fifty companies since 2011 that have expanded its technological capabilities and improved its software development team. Within the last quarter, the number of daily average users has increased by 14%.
The company holds an “A” grade for Growth, which means that we expect the company to continue expanding and developing. Twitter features a respectable debt/capital ratio of 25.89%. In essence, Twitter is not overusing debt to finance its projects or acquisitions, which means that the company is able to possess a healthier balance sheet with reduced liabilities. Twitter was recently promoted to a Zacks Rank #1 (Strong Buy).
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation. See Them Free>>
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Forget Tesla, Buy These 4 Growth Stocks Instead
Tesla (TSLA - Free Report) has been on fire for the better part of the last year, but now the company is facing setbacks. After hitting an all-time high in late June, the stock has experienced a rare downturn, plummeting more than 15% this week alone.
Tesla recently missed second-quarter vehicle delivery estimates, and now analysts are starting to become more skeptical of the company’s future.
“We remain sell rated on shares of TSLA where we see potential for downside as the Model 3 launch curve undershoots the company's production targets and as 2H17 margins likely disappoint,” said Goldman Sachs analyst David Tamberrino (also read: Here's Why Tesla Stock Is Sinking).
Tesla currently holds a Zacks Rank #3 (Hold), as well as “F” grades for Value and Growth. Also, Tesla sports a horrific -42.97% projected EPS growth and a -15.08% RoE, both of which trail its industry averages. Tesla holds a net margin of -8.46%, which means that they are not even close to turning a profit. Finally, the company possesses an extremely high debt/capital of 56.50%, which means they are heavily relying on debt or liabilities to finance its future projects.
All of these metrics show that Tesla—a company that is often considered a darling “growth stock”—is facing limited growth prospects approaching earnings season. Luckily, there are plenty of other stocks that possess higher growth potential than Tesla.
Check out these 4 strong growth stocks now:
1. The Progressive Corporation (PGR - Free Report)
The Progressive Corporation is an auto insurance company and a writer of auto insurance through various agents. Progressive constantly attempts to reward its shareholders with $192 million spent in 2016 to repurchase shares and a respectable 1.53% dividend. The company’s rates are extremely competitive in all its markets as it continues to gain from its expanded multi-product offering. Also, Progressive Corporation acquired a beta rating of 0.85, which means that it is considered less volatile than a typical security on the market.
Progressive Corporation features an astronomical projected EPS growth of 44.88% and projected sales growth of 13.06%, both of which tower of the industry averages of 9.18% and 1.12%, respectively. Furthermore, the company holds a strong current ratio of 0.45. This warrants that the firm does not heavily rely on debt to finance its projects, which creates a much healthier balance sheet consisting of a smaller amount of liabilities. The Progressive Corporation was recently promoted to a Zacks Rank #1 (Strong Buy).
2. Ferrari N.V. (RACE - Free Report)
Ferrari N.V. is engaged in designing, manufacturing and selling sports cars. Also, Ferrari has surpassed its earnings projections in each of the past five operational quarters by an average of 33.96%. Additionally, Ferrari possesses an “A” grade for Growth, which means that we project the company to continue to expand. Further, Ferrari’s net margin sits well above the industry average at 13.70%. In essence, Ferrari is retaining a larger amount of profit than its competitors, which can help fuel future growth.
Ferrari features a whopping RoE of 128.90% and current cash flow growth of 19.56%, both of which compare positively to the industry averages of 18.43% and 9.57%. The acclaimed car company holds a strong net margin of 13.70%, which beats the industry average of 4.24%. Basically, Ferrari is currently retaining a larger portion of its revenue than its competitors. Now might be the optimal time to purchase shares of Ferrari, which holds a Zacks Rank #1 (Strong Buy).
3. Michelin (MGDDY - Free Report)
Michelin manufactures tires for all types of vehicles and publishes maps, as well as guides, for numerous digital services. As of 60 days ago, Michelin’s full-year EPS estimates increased by 10.50% to a respectable $2.00. Also, Michelin features “A” grades for Growth and Momentum. This means that the company is projected to expand, and its share price has continued to increase. Further, Michelin pays its shareholders a strong 2.08% dividend per share.
Michelin features a strong projected sales growth of 12.23% and cash flow per share of $3.79, both of which compare favorably to the industry averages of 4.46% and $3.21, respectively. Finally, the company holds a RoE of 15.44%, which beats the industry average of 13.83%. This means that Michelin is producing a higher turnover rate from shareholder equity to assets than its competitors. Michelin was recently promoted to a Zacks Rank #1 (Strong Buy).
4. Twitter, Inc.
Twitter is a public, real-time, global platform where any user can create a Tweet and follow other users throughout the platform. Acquisitions have been vital to Twitter’s growth trajectory as the company’s has acquired over fifty companies since 2011 that have expanded its technological capabilities and improved its software development team. Within the last quarter, the number of daily average users has increased by 14%.
The company holds an “A” grade for Growth, which means that we expect the company to continue expanding and developing. Twitter features a respectable debt/capital ratio of 25.89%. In essence, Twitter is not overusing debt to finance its projects or acquisitions, which means that the company is able to possess a healthier balance sheet with reduced liabilities. Twitter was recently promoted to a Zacks Rank #1 (Strong Buy).
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation. See Them Free>>