Tesla (TSLA) shares soared 8.1% in the last trading session to close at $121.82. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock’s 42.1% loss over the past four weeks.
Shares of Tesla were up for the second straight day yesterday, after a seven-session losing streak. The electric vehicle (EV) leader has been witnessing massive sell-off lately and is the most oversold that it has ever been. There has been no specific news/development, which could account for the recent price surge. So, this might just be a brief respite and could be part of a late Santa Claus rally. Given the rising economic uncertainty, growing angst over Musk’s Twitter focus and fresh production challenges in China amid soaring COVID-19 cases, we don’t expect the rally to have legs.
This electric car maker is expected to post quarterly earnings of $1.19 per share in its upcoming report, which represents a year-over-year change of +40%. Revenues are expected to be $25.23 billion, up 42.4% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For Tesla, the consensus EPS estimate for the quarter has been revised 3.2% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn’t usually translate into price appreciation. So, make sure to keep an eye on TSLA going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see
the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here >>>>
Tesla belongs to the Zacks Automotive – Domestic industry. Another stock from the same industry, Harley-Davidson (HOG), closed the last trading session 1.8% higher at $41. Over the past month, HOG has returned -14.5%.
For Harley-Davidson
, the consensus EPS estimate for the upcoming report has changed +110% over the past month to $0.03. This represents a change of -78.6% from what the company reported a year ago. Harley-Davidson currently has a Zacks Rank of #2 (Buy).
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