Tesla Stock Down 1.65%, Zacks Equity Research Gives TSLA Shares ‘Hold’ Rating

UTC by Steve Muchoki · 3 min read
Tesla Stock Down 1.65%, Zacks Equity Research Gives TSLA Shares ‘Hold’ Rating
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After a critical analysis, Zacks Rank gave Tesla shares a ‘Hold’ rating, citing notable fundamentals that are yet to materialize.

Shares of American giant electric vehicle company Tesla Inc (NASDAQ: TSLA) dropped approximately 1.65% on Wednesday to close the day trading at $622.77 and got a new rating from Zacks Equity. The drop had further been magnified during Wednesday’s pre-market as they were down 0.63% to trade around $618.

However, the electric vehicle giant has experienced one of its best years in market performance. The market data provided by MarketWatch indicates Tesla shares have rallied over sixfold year to date. Ostensibly, the company has seen its market valuation surpass $600 billion, thus one of the most valuable companies in the tech industry with bright future prospects.

Having been listed in the S&P 500 index, the company is poised to enjoy the full benefits of being a member in the coming quarters. This was followed after the company split its shares in a 5:1 ratio. Apparently, it is expected that the company might further split its shares next year in order to secure a position on the Dow Jones list.

While investors remain optimistic about the company’s ability to deliver amid coronavirus recovery, it will be largely influenced by the demand in different markets. Tesla has recently announced that it will ship significant China-assembled models to Europe including the new Model Y. The company is also eyeing the vast India market in the coming quarters.

The aggressive approach is largely due to the increased competition from the Chinese EV companies that are seeking to depose Tesla’s market dominance.

Zacks: Tesla Market Outlook

After the report of a profitable year, investors are now keen on the next quarterly earnings results. “Investors will be hoping for strength from TSLA as it approaches its next earnings release. In that report, analysts expect TSLA to post earnings of $0.80 per share. This would mark year-over-year growth of 86.05%,” a new report by the Zacks Consensus Estimate indicates.

In addition, the Zacks report noted that it is projecting Tesla’s net sales of $9.92 billion, up 34.3% from the year-ago period.

Meanwhile, the Zacks consensus further highlighted that it projects Tesla’s earnings per share of $2.24 and revenue of $30.99 billion. Notably, this would represent changes of +7366.67% and +26.09%, respectively, from the prior year.

After a critical analysis, Zacks Rank gave Tesla shares a ‘Hold’ rating, citing notable fundamentals that are yet to materialize.

This year’s Tesla shares success was so automatic as they were among the most shorted United States stocks at the beginning of the year. Notably, they had up to 18% of its float (total tradable shares) sold short. This even prompted Tesla CEO Elon Musk to launch the short shorts that have seen as a teaser to short-sellers who had failed.

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Steve Muchoki

A financial analyst who sees positive income in both directions of the market (bulls & bears). Bitcoin is my crypto safe haven, free from government conspiracies. Mythology is my mystery! "You cannot enslave a mind that knows itself. That values itself. That understands itself."

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