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Netflix (NFLX) Stock Sinks As Market Gains: What You Should Know

In the latest trading session, Netflix (NFLX) closed at $512.66, marking a -0.6% move from the previous day. This change lagged the S&P 500's daily gain of 0.28%. Elsewhere, the Dow gained 0.35%, while the tech-heavy Nasdaq added 0.5%.

Heading into today, shares of the internet video service had gained 9.62% over the past month, lagging the Consumer Discretionary sector's gain of 11.84% and outpacing the S&P 500's gain of 5.42% in that time.

Investors will be hoping for strength from NFLX as it approaches its next earnings release. The company is expected to report EPS of $1.37, up 5.38% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $6.60 billion, up 20.64% from the prior-year quarter.

NFLX's full-year Zacks Consensus Estimates are calling for earnings of $6.26 per share and revenue of $24.95 billion. These results would represent year-over-year changes of +51.57% and +23.76%, respectively.

It is also important to note the recent changes to analyst estimates for NFLX. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.01% lower. NFLX is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that NFLX has a Forward P/E ratio of 82.38 right now. Its industry sports an average Forward P/E of 9.8, so we one might conclude that NFLX is trading at a premium comparatively.

Also, we should mention that NFLX has a PEG ratio of 2.75. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. NFLX's industry had an average PEG ratio of 1.3 as of yesterday's close.

The Broadcast Radio and Television industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 98, which puts it in the top 39% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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