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

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In the latest trading session, Netflix (NFLX - Free Report) closed at $549.22, marking a +1.7% move from the previous day. This change outpaced the S&P 500's 1.11% gain on the day.

Heading into today, shares of the internet video service had gained 5.67% over the past month, outpacing the Consumer Discretionary sector's loss of 7.07% and the S&P 500's gain of 4.72% in that time.

NFLX will be looking to display strength as it nears its next earnings release, which is expected to be April 20, 2021. The company is expected to report EPS of $2.98, up 89.81% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $7.14 billion, up 23.71% from the year-ago period.

NFLX's full-year Zacks Consensus Estimates are calling for earnings of $9.83 per share and revenue of $30.01 billion. These results would represent year-over-year changes of +61.68% and +20.05%, respectively.

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 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. 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.2% higher. 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 56.35 right now. This represents a premium compared to its industry's average Forward P/E of 15.59.

Investors should also note that NFLX has a PEG ratio of 1.96 right now. 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. The Broadcast Radio and Television was holding an average PEG ratio of 1.26 at yesterday's closing price.

The Broadcast Radio and Television industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 102, putting it in the top 41% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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