Published -July 18th, 2023 @ 12:02 PM (GMT+2)

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In the world of stocks, Tesla (NASDAQ:TSLA) and Netflix (NASDAQ:NFLX) have been standout performers this year. Tesla's stock has surged by an impressive +136%, while Netflix has seen a solid increase of +53%. As investors eagerly await their quarterly results, let's assess whether it's an excellent time to consider buying stocks in these market leaders.

Tesla Q2 Preview:
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Tesla, the renowned auto giant, and EV leader, is set to release its fiscal second-quarter earnings. Analysts expect a 9% year-over-year rise in earnings per share (EPS) to $0.83. Sales are projected to climb by a remarkable 47% to $24.88 billion, compared to $16.93 billion in the same quarter last year.
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Moreover, the Zacks Expected Surprise Prediction (ESP) suggests that Tesla might surpass earnings expectations, with the Most Accurate Estimate pegging Q2 EPS at $0.85 per share.
Analysts predict:
 

• -13% dip in Tesla's earnings for fiscal 2023
• 33% surge in FY24 -  reaching $4.70 per share 
• 23% increase of total sales by this year and rise by 
• another 25% in FY24, reaching $125.81 billion
  
  

Analyst Recommendation:

‍Among the 25 analysts covering Tesla, 28% rate it as a Strong Buy, and four analysts rate it as a Buy. Hold ratings were given by 14 analysts, while only three analysts recommend selling the stock.
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Technical Analysis:

‍From a technical perspective, Tesla's stock price on July 14, 2023, was $281.38, comfortably above its 10-day, 50-day, and 200-day moving averages. The rise of the 50-day moving average above the 200-day moving average, known as a golden cross, indicates bullish sentiment.

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Netflix Q2 Preview:

As for streaming giant Netflix, analysts anticipate a 12% year-over-year decline in EPS for the fiscal second quarter, settling at $2.82 per share compared to $3.20 in Q2 2022. However, sales are expected to rise by 3% from last year to $8.26 billion.

Interestingly, the Zacks ESP also indicates that Netflix might surpass earnings expectations, as the Most Accurate Estimate stands at $2.88 per share, 2% higher than the Zacks Consensus. Looking ahead, estimates show that Netflix's annual earnings will continue to rise:

• 13% projected increase this year 
• 31% jump in FY24 - reaching $14.74 per share 
• 7% increase in sales in FY23 
• 13% increase in FY24 - reaching $38.43 billion.
  
  

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P/E Valuation:

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Considering valuation metrics such as price-to-earnings (P/E) ratios remains crucial, even in a year where many tech giants and industry leaders like Tesla and Netflix command a premium.

Tesla stock currently trades at $290 per share, with a forward P/E ratio of 79.5X, 35% higher than the Zacks Automotive-Domestic Industry average of 49.6X. Although Tesla trades below its 90.6X high from the past year, it still exceeds the median of 57.3X.

In comparison, Netflix stock trades at $450 per share, with a P/E valuation of 39.2X forward earnings, below the Broadcasting Radio and Television Industry average of 49.6X. However, Netflix trades near its one-year high of 39.8X, exceeding the median of 28.7X.

Conclusion:
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Both Tesla and Netflix stocks currently hold a Zacks Rank #3 (Hold). While the future looks promising for these industry leaders, considering their remarkable performance, it's worth noting that better buying opportunities may lie ahead after their substantial rallies.

The P/E valuations of these stocks suggest such possibilities. However, holding onto Tesla and Netflix stocks could still be rewarding, mainly if they beat earnings expectations and offer favorable guidance.

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To find more about Netflix Future Forecast, Read more here

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The information on mexem.com is for general informational purposes only. It should not be regarded as investment advice. Investing in stocks involves risk. A stock's past performance is not a reliable indicator of its future performance. Always consult a financial advisor or trusted sources before making any investment decisions

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