So far this year, Tesla (TSLA) and Netflix (NFLX) stocks have soared +136% and +53% respectively. This certainly has investors wondering if it’s time to buy stock in these market leaders with their quarterly results approaching.
Let’s see if now is indeed a good time to buy Tesla or Netflix stock heading into their earnings reports on Wednesday, July 19.
Tesla Q2 Preview
Auto giant and EV leader Tesla will be releasing its fiscal second-quarter earnings on Wednesday with EPS expected to rise 9% year over year at $0.83 per share. Sales are forecasted to climb 47% to $24.88 billion compared to $16.93 billion in the prior-year quarter.
Even better, the Zacks Expected Surprise Prediction (ESP) indicates Tesla could beat earnings expectations with the Most Accurate Estimate having Q2 EPS at $0.85 per share.
Overall, Tesla’s earnings are forecasted to dip -13% in fiscal 2023 but rebound and soar 33% in FY24 at $4.70 per share. Total sales are projected to jump 23% this year and climb another 25% in FY24 to $125.81 billion.
Netflix Q2 Preview
Looking at streaming giant Netflix, its fiscal second-quarter earnings are expected to dip -12% YoY at $2.82 per share compared to EPS of $3.20 in Q2 2022. This is despite sales being forecasted to rise 3% from a year ago at $8.26 billion.
Notably, the Zacks ESP also indicates Netflix could beat earnings expectations with the Most Accurate Estimate having Q2 EPS at $2.88 per share and 2% above the Zacks Consensus.
According to Zacks estimates Netflix’s annual earnings are still expected to rise 13% this year and leap another 31% in FY24 at $14.74 per share. On the top line, sales are anticipated to rise 7% in FY23 and jump another 13% in FY24 to $38.43 billion.
P/E Valuation
Monitoring valuation metrics such as price-to-earnings is still important despite the premium many big tech stocks and other industry leaders such as Tesla and Netflix are able to command this year.
In regards to a premium, Tesla stock trades at $290 a share and 79.5X forward earnings which is 35% above the Zacks Automotive-Domestic Industry average of 49.6X. Tesla trades beneath its high of 90.6X over the last year but noticeably above the median of 57.3X.
Pivoting to Netflix stock which trades at $450 a share, its P/E valuation of 39.2X forward earnings is currently below its Broadcasting Radio and Television Industry average of 49.6X. With that being said, Netflix currently trades near its high over the last year of 39.8X and above the median of 28.7X.
Bottom Line
At the moment, Tesla and Netflix stock both land a Zacks Rank #3 (Hold). The outlook for these respective industry leaders is still intriguing but after such extensive rallies, there could be better buying opportunities ahead.
Their P/E valuations may be somewhat indicative of such but with Tesla and Netflix expected to beat earnings expectations holding on to their stocks could be rewarding from current levels especially if they can offer favorable guidance.
5 Stocks Set to Double
Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>
So far this year, Tesla (TSLA) and Netflix (NFLX) stocks have soared +136% and +53% respectively. This certainly has investors wondering if it’s time to buy stock in these market leaders with their quarterly results approaching.
Let’s see if now is indeed a good time to buy Tesla or Netflix stock heading into their earnings reports on Wednesday, July 19.
Tesla Q2 Preview
Auto giant and EV leader Tesla will be releasing its fiscal second-quarter earnings on Wednesday with EPS expected to rise 9% year over year at $0.83 per share. Sales are forecasted to climb 47% to $24.88 billion compared to $16.93 billion in the prior-year quarter.
Even better, the Zacks Expected Surprise Prediction (ESP) indicates Tesla could beat earnings expectations with the Most Accurate Estimate having Q2 EPS at $0.85 per share.
Overall, Tesla’s earnings are forecasted to dip -13% in fiscal 2023 but rebound and soar 33% in FY24 at $4.70 per share. Total sales are projected to jump 23% this year and climb another 25% in FY24 to $125.81 billion.
Netflix Q2 Preview
Looking at streaming giant Netflix, its fiscal second-quarter earnings are expected to dip -12% YoY at $2.82 per share compared to EPS of $3.20 in Q2 2022. This is despite sales being forecasted to rise 3% from a year ago at $8.26 billion.
Notably, the Zacks ESP also indicates Netflix could beat earnings expectations with the Most Accurate Estimate having Q2 EPS at $2.88 per share and 2% above the Zacks Consensus.
According to Zacks estimates Netflix’s annual earnings are still expected to rise 13% this year and leap another 31% in FY24 at $14.74 per share. On the top line, sales are anticipated to rise 7% in FY23 and jump another 13% in FY24 to $38.43 billion.
P/E Valuation
Monitoring valuation metrics such as price-to-earnings is still important despite the premium many big tech stocks and other industry leaders such as Tesla and Netflix are able to command this year.
In regards to a premium, Tesla stock trades at $290 a share and 79.5X forward earnings which is 35% above the Zacks Automotive-Domestic Industry average of 49.6X. Tesla trades beneath its high of 90.6X over the last year but noticeably above the median of 57.3X.
Pivoting to Netflix stock which trades at $450 a share, its P/E valuation of 39.2X forward earnings is currently below its Broadcasting Radio and Television Industry average of 49.6X. With that being said, Netflix currently trades near its high over the last year of 39.8X and above the median of 28.7X.
Bottom Line
At the moment, Tesla and Netflix stock both land a Zacks Rank #3 (Hold). The outlook for these respective industry leaders is still intriguing but after such extensive rallies, there could be better buying opportunities ahead.
Their P/E valuations may be somewhat indicative of such but with Tesla and Netflix expected to beat earnings expectations holding on to their stocks could be rewarding from current levels especially if they can offer favorable guidance.
5 Stocks Set to Double
Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>
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