Back to top

Image: Bigstock

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

Read MoreHide Full Article

In the latest trading session, Netflix (NFLX - Free Report) closed at $553.41, marking a +1.33% move from the previous day. This move outpaced the S&P 500's daily gain of 1.14%. Elsewhere, the Dow gained 1.35%, while the tech-heavy Nasdaq added 0.99%.

Heading into today, shares of the internet video service had lost 4.13% over the past month, lagging the Consumer Discretionary sector's gain of 6.19% and the S&P 500's gain of 1.2% in that time.

Investors will be hoping for strength from NFLX as it approaches its next earnings release. In that report, analysts expect NFLX to post earnings of $2.87 per share. This would mark year-over-year growth of 82.8%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $7.14 billion, up 23.71% from the year-ago period.

NFLX's full-year Zacks Consensus Estimates are calling for earnings of $9.73 per share and revenue of $29.89 billion. These results would represent year-over-year changes of +60.03% and +19.56%, respectively.

Investors might also notice recent changes to analyst estimates for NFLX. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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, 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. The Zacks Consensus EPS estimate has moved 0.84% higher within the past month. NFLX is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, NFLX is holding a Forward P/E ratio of 54.84. This represents a premium compared to its industry's average Forward P/E of 16.59.

Meanwhile, NFLX's PEG ratio is currently 1.88. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Broadcast Radio and Television stocks are, on average, holding a PEG ratio of 1.44 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 190, putting it in the bottom 26% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Netflix, Inc. (NFLX) - free report >>

Published in