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Will Tesla's Stock Ride Higher as Markets Stabilize?
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Recently falling to under $200 a share, Tesla’s (TSLA - Free Report) stock has dropped -20% over the last month after previously edging towards its 52-week high of $278.98 seen last September.
Tesla’s stock had started to post a masterful rebound before its underwhelming Q2 report in July and the selloff afterward was extended by recent market volatility.
Investors may be wondering if Tesla's stock can get back to its recovery as the broader indexes stabilize. To that point, TSLA is still up +14% in the last three months to outperform the S&P 500’s +1% and the Nasdaq’s +2%.
Image Source: Zacks Investment Research
Recent Performance Overview
Tesla’s stock has stayed in correction territory following its Q2 earnings of $0.52 a share which decreased -43% from EPS of $0.91 in the comparative quarter. This also missed Q2 EPS estimates of $0.62 by -16%.
Quarterly sales did reach a record of $25.5 billion which was a 2% increase from $24.92 billion in Q2 2023 and beat expectations by 1%. Price cuts to its EV fleet led to lower margins with CEO Elon Musk stating an increasing number of competitors have entered the market and offered substantial discounts in an attempt to undercut Tesla.
The auto giant does see this as a short-term headwind with annual earnings now expected to decline -26% this year but projected to rebound and climb 36% in fiscal 2025 to $3.14 per share.
Image Source: Zacks Investment Research
The Technical Tape & Valuation
Underlying the recent bearish move in Tesla’s stock is that TSLA moved below its 50-day simple moving average (SMA) of $209 and continued to fall after dipping beneath its 200-day SMA of $201. Traders will certainly want to see TSLA retake these levels.
Image Source: Zacks Investment Research
However, the correction has helped to normalize Tesla’s valuation with TSLA trading at 87.1X forward earnings which is 38% below its two-year high of 141.2X and closer to the median of 76.7X during this period.
Image Source: Zacks Investment Research
Bottom Line
Tesla’s stock currently lands a Zacks Rank #3 (Hold). The EV pioneer's long-term outlook is still attractive but TSLA remains in correction territory and there could be better buying opportunities ahead. That said, the leveling of Tesla’s valuation should start to attract more investors.
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Will Tesla's Stock Ride Higher as Markets Stabilize?
Recently falling to under $200 a share, Tesla’s (TSLA - Free Report) stock has dropped -20% over the last month after previously edging towards its 52-week high of $278.98 seen last September.
Tesla’s stock had started to post a masterful rebound before its underwhelming Q2 report in July and the selloff afterward was extended by recent market volatility.
Investors may be wondering if Tesla's stock can get back to its recovery as the broader indexes stabilize. To that point, TSLA is still up +14% in the last three months to outperform the S&P 500’s +1% and the Nasdaq’s +2%.
Image Source: Zacks Investment Research
Recent Performance Overview
Tesla’s stock has stayed in correction territory following its Q2 earnings of $0.52 a share which decreased -43% from EPS of $0.91 in the comparative quarter. This also missed Q2 EPS estimates of $0.62 by -16%.
Quarterly sales did reach a record of $25.5 billion which was a 2% increase from $24.92 billion in Q2 2023 and beat expectations by 1%. Price cuts to its EV fleet led to lower margins with CEO Elon Musk stating an increasing number of competitors have entered the market and offered substantial discounts in an attempt to undercut Tesla.
The auto giant does see this as a short-term headwind with annual earnings now expected to decline -26% this year but projected to rebound and climb 36% in fiscal 2025 to $3.14 per share.
Image Source: Zacks Investment Research
The Technical Tape & Valuation
Underlying the recent bearish move in Tesla’s stock is that TSLA moved below its 50-day simple moving average (SMA) of $209 and continued to fall after dipping beneath its 200-day SMA of $201. Traders will certainly want to see TSLA retake these levels.
Image Source: Zacks Investment Research
However, the correction has helped to normalize Tesla’s valuation with TSLA trading at 87.1X forward earnings which is 38% below its two-year high of 141.2X and closer to the median of 76.7X during this period.
Image Source: Zacks Investment Research
Bottom Line
Tesla’s stock currently lands a Zacks Rank #3 (Hold). The EV pioneer's long-term outlook is still attractive but TSLA remains in correction territory and there could be better buying opportunities ahead. That said, the leveling of Tesla’s valuation should start to attract more investors.