Tesla, Inc. (TSLA) is Attracting Investor Attention: Here is What You Should Know

Tesla (TSLA) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.Shares of this electric car maker have returned +47.1% over the past month versus the Zacks S&P 500 composite's +5.8% change. The Zacks Automotive - Domestic industry, to which Tesla belongs, has gained 37% over this period. Now the key question is: Where could the stock be headed in the near term?Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.Revisions to Earnings EstimatesRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.Tesla is expected to post earnings of $0.77 per share for the current quarter, representing a year-over-year change of +8.5%. Over the last 30 days, the Zacks Consensus Estimate has changed +2.6%.For the current fiscal year, the consensus earnings estimate of $2.47 points to a change of -20.8% from the prior year. Over the last 30 days, this estimate has changed +1.5%.For the next fiscal year, the consensus earnings estimate of $3.20 indicates a change of +29.5% from what Tesla is expected to report a year ago. Over the past month, the estimate has changed +0.6%.With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #1 (Strong Buy) for Tesla.The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:12 Month EPSRevenue Growth ForecastWhile earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.For Tesla, the consensus sales estimate for the current quarter of $27.82 billion indicates a year-over-year change of +10.6%. For the current and next fiscal years, $99.65 billion and $116.03 billion estimates indicate +3% and +16.4% changes, respectively.Last Reported Results and Surprise HistoryTesla reported revenues of $25.18 billion in the last reported quarter, representing a year-over-year change of +7.9%. EPS of $0.72 for the same period compares with $0.66 a year ago.Compared to the Zacks Consensus Estimate of $25.55 billion, the reported revenues represent a surprise of -1.45%. The EPS surprise was +24.14%.Over the last four quarters, the company surpassed EPS estimates just once. The company topped consensus revenue estimates just once over this period.ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an An is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.Tesla is graded F on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Tesla. However, its Zacks Rank #1 does suggest that it may outperform the broader market in the near term.Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 228 positions with double- and triple-digit gains in 2023 alone.See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Tesla, Inc. (TSLA): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks