Tesla (TSLA) Moves 5.3% Higher: Will This Strength Last?

Tesla (TSLA) shares ended the last trading session 5.3% higher at $282.76. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 1.3% loss over the past four weeks.

Tesla shares climbed yesterday as investors reacted to speculation that Elon Musk may soon step down from his role at the Department of Government Efficiency (DOGE). Musk’s deep involvement in DOGE had been a growing concern, with many attributing Tesla’s recent struggles to his divided attention. With his tenure set to end in late May, investors are optimistic that he will refocus on Tesla, potentially steering the company back on track.

This electric car maker is expected to post quarterly earnings of $0.50 per share in its upcoming report, which represents a year-over-year change of +11.1%. Revenues are expected to be $22.5 billion, up 5.6% 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 12.2% 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, Blue Bird (BLBD), closed the last trading session 2.4% higher at $33.71. Over the past month, BLBD has returned 0.3%.

Blue Bird's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.96. Compared to the company's year-ago EPS, this represents a change of +7.9%. Blue Bird currently boasts a Zacks Rank of #2 (Buy).

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This article originally published on Zacks Investment Research (zacks.com).

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