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

In the latest trading session, Netflix (NFLX) closed at $298.60, marking a +1.46% move from the previous day. The stock outpaced the S&P 500's daily gain of 0.26%. Meanwhile, the Dow gained 0.13%, and the Nasdaq, a tech-heavy index, added 0.4%.

Prior to today's trading, shares of the internet video service had lost 4.88% over the past month. This has lagged the Consumer Discretionary sector's gain of 5.52% and the S&P 500's gain of 3.92% in that time.

Wall Street will be looking for positivity from NFLX as it approaches its next earnings report date. On that day, NFLX is projected to report earnings of $1.05 per share, which would represent year-over-year growth of 17.98%. Our most recent consensus estimate is calling for quarterly revenue of $5.25 billion, up 31.34% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.25 per share and revenue of $20.22 billion. These totals would mark changes of +21.27% and +28.01%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for NFLX. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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. The Zacks Consensus EPS estimate has moved 0.89% lower within the past month. NFLX is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note NFLX's current valuation metrics, including its Forward P/E ratio of 90.53. For comparison, its industry has an average Forward P/E of 17.35, which means NFLX is trading at a premium to the group.

We can also see that NFLX currently has a PEG ratio of 3.02. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Broadcast Radio and Television stocks are, on average, holding a PEG ratio of 1.61 based on yesterday's closing prices.

The Broadcast Radio and Television industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 205, putting it in the bottom 20% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow NFLX in the coming trading sessions, be sure to utilize Zacks.com.


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