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

Netflix (NFLX) closed at $359.91 in the latest trading session, marking a -0.56% move from the prior day. This move lagged the S&P 500's daily gain of 0.18%. Elsewhere, the Dow gained 0.24%, while the tech-heavy Nasdaq added 0.03%.

Prior to today's trading, shares of the internet video service had gained 11.31% over the past month. This has outpaced the Consumer Discretionary sector's gain of 4.76% and the S&P 500's gain of 4.28% 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 $0.58, down 9.38% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $4.49 billion, up 21.29% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.05 per share and revenue of $20.17 billion. These totals would mark changes of +51.12% and +27.69%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for NFLX. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.05% higher. NFLX is currently a Zacks Rank #3 (Hold).

Investors should also note NFLX's current valuation metrics, including its Forward P/E ratio of 89.47. This valuation marks a premium compared to its industry's average Forward P/E of 13.65.

Also, we should mention that NFLX has a PEG ratio of 2.98. 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. NFLX's industry had an average PEG ratio of 1.14 as of yesterday's close.

The Broadcast Radio and Television industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 155, putting it in the bottom 40% 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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