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Tesla (TSLA) Increases Yet Falls Behind Market: What Investors Need to Know

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Tesla (TSLA - Free Report) closed the most recent trading day at $197.41, moving +1.36% from the previous trading session. This move lagged the S&P 500's daily gain of 2.11%. Meanwhile, the Dow gained 1.18%, and the Nasdaq, a tech-heavy index, added 2.96%.

Heading into today, shares of the electric car maker had lost 6.28% over the past month, lagging the Auto-Tires-Trucks sector's gain of 2.25% and the S&P 500's gain of 3.08% in that time.

Analysts and investors alike will be keeping a close eye on the performance of Tesla in its upcoming earnings disclosure. The company's earnings per share (EPS) are projected to be $0.67, reflecting a 21.18% decrease from the same quarter last year. Meanwhile, the latest consensus estimate predicts the revenue to be $25.8 billion, indicating a 10.58% increase compared to the same quarter of the previous year.

For the full year, the Zacks Consensus Estimates project earnings of $3.16 per share and a revenue of $111.96 billion, demonstrating changes of +1.28% and +15.69%, respectively, from the preceding year.

It is also important to note the recent changes to analyst estimates for Tesla. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 19.56% lower. At present, Tesla boasts a Zacks Rank of #3 (Hold).

From a valuation perspective, Tesla is currently exchanging hands at a Forward P/E ratio of 61.71. This represents a premium compared to its industry's average Forward P/E of 13.46.

Meanwhile, TSLA's PEG ratio is currently 2.76. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. As of the close of trade yesterday, the Automotive - Domestic industry held an average PEG ratio of 1.72.

The Automotive - Domestic industry is part of the Auto-Tires-Trucks sector. This industry, currently bearing a Zacks Industry Rank of 67, finds itself in the top 27% echelons of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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