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Tesla (TSLA - Free Report) is a Zacks Rank #2 (Buy) and it has been leading a lot of the solar stocks higher. Sure, there is a automobilie component to the company as well as having top notch leadership, but of late solar stocks have been pushing higher. Let’s take a deeper look at this stock in this Bull of the Day article.
Description
Tesla, Inc. makes and sells electric vehicles, and energy generation and storage systems in the United States, China, and internationally. The company was formerly known as Tesla Motors, Inc. and changed its name to Tesla, Inc. in February 2017. Tesla, Inc. was founded in 2003 and is headquartered in Palo Alto, California
Earnings History
The first thing I do when I look at stock is look to see if the company is beating the number. This tells me right away where the market’s expectations have been for the company and how management has been able to communicate to the market. A stock that consistently beats is one that has management communicating expectations to Wall Street that can be achieved. That is what you want to see.
For TSLA, I see great history of beating the Zacks Consensus Estimate. There are three beats over the last four quarters.
The average positive earnings surprise over the last fours quarters works out to be 147%, which means that they are posting results that are more than what is expected.
There was a monster beat four quarters ago (544%) and that skewed the average up quite a bit. Still, the company beats and that helps boost estimates higher and higher.
Earnings Estimates Revisions
The Zacks Rank tells us which stocks are seeing earnings estimates move higher. For TSLA, I see estimates moving higher.
Over the last 60 days I am seeing several increases.
This quarter has moved from 89 cents to $0.90.
Next quarter has held still at $1.10.
The full year number has increase from $4.25 to $4.30 over the last 60 days.
Next year is at $6.27 and that is up from $6.26 over the same time horizon.
Positive movement in earnings estimates like that are the reason that this stock is a Zacks Rank #2 (Buy).
Valuation
The valuation for TSLA has always been the core reason for it being widely hated and heavily shorted. For the most part, the war of the shorts is over and the longs have declared victory as short interest in the stock has dropped from a short interest level of 30% plus to a much more reasonable level of about 4.4%.
As much as that is a story in itself, the idea is that investors still see a lot of growth in this story. The topline is expected to grow at about 92% this year and 45% next year. That is huge growth for a company the size of TSLA.
So that growth makes the 159x forward earnings multiple seem a little less impossibly high. The 27x book multiple is high, but again this company is more than cars and more than solar panels.
At the end of the day, the growth will continue for TSLA and that growth will help push the stock back to new highs in the coming quarters.
Image: Bigstock
Bull Of The Day: Tesla (TSLA)
Tesla (TSLA - Free Report) is a Zacks Rank #2 (Buy) and it has been leading a lot of the solar stocks higher. Sure, there is a automobilie component to the company as well as having top notch leadership, but of late solar stocks have been pushing higher. Let’s take a deeper look at this stock in this Bull of the Day article.
Description
Tesla, Inc. makes and sells electric vehicles, and energy generation and storage systems in the United States, China, and internationally. The company was formerly known as Tesla Motors, Inc. and changed its name to Tesla, Inc. in February 2017. Tesla, Inc. was founded in 2003 and is headquartered in Palo Alto, California
Earnings History
The first thing I do when I look at stock is look to see if the company is beating the number. This tells me right away where the market’s expectations have been for the company and how management has been able to communicate to the market. A stock that consistently beats is one that has management communicating expectations to Wall Street that can be achieved. That is what you want to see.
For TSLA, I see great history of beating the Zacks Consensus Estimate. There are three beats over the last four quarters.
The average positive earnings surprise over the last fours quarters works out to be 147%, which means that they are posting results that are more than what is expected.
There was a monster beat four quarters ago (544%) and that skewed the average up quite a bit. Still, the company beats and that helps boost estimates higher and higher.
Earnings Estimates Revisions
The Zacks Rank tells us which stocks are seeing earnings estimates move higher. For TSLA, I see estimates moving higher.
Over the last 60 days I am seeing several increases.
This quarter has moved from 89 cents to $0.90.
Next quarter has held still at $1.10.
The full year number has increase from $4.25 to $4.30 over the last 60 days.
Next year is at $6.27 and that is up from $6.26 over the same time horizon.
Positive movement in earnings estimates like that are the reason that this stock is a Zacks Rank #2 (Buy).
Valuation
The valuation for TSLA has always been the core reason for it being widely hated and heavily shorted. For the most part, the war of the shorts is over and the longs have declared victory as short interest in the stock has dropped from a short interest level of 30% plus to a much more reasonable level of about 4.4%.
As much as that is a story in itself, the idea is that investors still see a lot of growth in this story. The topline is expected to grow at about 92% this year and 45% next year. That is huge growth for a company the size of TSLA.
So that growth makes the 159x forward earnings multiple seem a little less impossibly high. The 27x book multiple is high, but again this company is more than cars and more than solar panels.
At the end of the day, the growth will continue for TSLA and that growth will help push the stock back to new highs in the coming quarters.
Chart
Tesla, Inc. Price and Consensus
Tesla, Inc. price-consensus-chart | Tesla, Inc. Quote