Monday, July 29, 2013
Investing in Electric Automobiles
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2013 has been an incredible year for the automotive industry, but it has been particularly outstanding for newcomer Tesla Motors (TSLA) according to Zacks Investment Research. The electric car manufacturer has made a name for itself thanks to solid sales and earnings that crushed estimates, while the cool factor of its vehicles have also helped the firm to gain some recognition.
These factors have allowed TSLA’s stock price to surge this year, as strong results and optimism over electric car demand in the future pushed the stock up to new heights. In fact, TSLA shares have added about 250% since the start of the year, and over 340% in the trailing one year period, making the company one of the hottest stocks in the market, and a favorite pick among growth investors.
Given this incredible surge, many are likely wondering if the run can continue for TSLA heading into the end of the year. If you look at analyst expectations for the company though, there is plenty of reason to believe that TSLA can keep this streak alive and put up some more solid gains.
TSLA Estimates in Focus
Analysts remain extremely bullish on the company and we have seen some estimate revisions higher in the past few weeks. This has helped to push the current year consensus from a loss of 77 cents a share 30 days ago, to its current level of a loss of 60 cents a share today.
Current quarter and next quarter estimates have also risen over the past thirty days too, suggesting that analysts like the firm’s prospects in the short term as well.
This move higher in the estimates picture also helps to push the Earnings ESP for the current quarter up to 16.67%. So, the firm could be poised to beat estimates this quarter, at least when looking at this metric.
Growth Rates Still Incredible
Beyond this favorable estimate picture, it is also worth noting that growth levels for TSLA are still quite impressive. The company is expected to see growth of 81% for the current year, and an astounding 173% for the next year period.
This is especially incredible when you consider where the company was, and where the firm is expected to go in the future. The year ago EPS for the company was $-.68/share and current projections for the 2014 year call for earnings of $0.50/share. Clearly, the firm is on the right track and is well on its way to becoming a formidable player in the automotive market.
This soaring estimate picture and strong growth outlook has helped TSLA to earn a Zacks Rank #1 (Strong Buy), suggesting that the company will outperform other stocks in the near future. If that wasn’t enough, the stock also has a Zacks Recommendation of ‘Outperform’, meaning that the long-term future for TSLA is quite bright as well.
It is also worth noting that the firm is in great company, as the broad automotive industry is coming back strong. In fact, the automotive-domestic Zacks Industry is currently Ranked in the top 10%, so there are definitely some industry tailwinds too.
Given these factors, it looks like Tesla, even at its current levels, may still be a great candidate for a portfolio. There are not only positive industry trends behind the firm, but a variety of company specific points—such as strong growth rates and increased optimism from analysts—which suggest that there is still time to get in on this amazing growth story.
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