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

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Netflix (NFLX - Free Report) closed the most recent trading day at $463, moving +0.68% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.46%. On the other hand, the Dow registered a gain of 0.48%, and the technology-centric Nasdaq increased by 0.7%.

Shares of the internet video service witnessed a gain of 3.43% over the previous month, trailing the performance of the Consumer Discretionary sector with its gain of 6.68% and the S&P 500's gain of 4.85%.

The investment community will be paying close attention to the earnings performance of Netflix in its upcoming release. In that report, analysts expect Netflix to post earnings of $2.18 per share. This would mark year-over-year growth of 1716.67%. Alongside, our most recent consensus estimate is anticipating revenue of $8.7 billion, indicating a 10.86% upward movement from the same quarter last year.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $12.07 per share and revenue of $33.6 billion, indicating changes of +21.31% and +6.26%, respectively, compared to the previous year.

Any recent changes to analyst estimates for Netflix should also be noted by investors. 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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Netflix is currently sporting a Zacks Rank of #3 (Hold).

Looking at valuation, Netflix is presently trading at a Forward P/E ratio of 38.1. This denotes a premium relative to the industry's average Forward P/E of 14.71.

It's also important to note that NFLX currently trades at a PEG ratio of 1.79. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Broadcast Radio and Television industry currently had an average PEG ratio of 1.47 as of yesterday's close.

The Broadcast Radio and Television industry is part of the Consumer Discretionary sector. This industry, currently bearing a Zacks Industry Rank of 86, finds itself in the top 35% echelons of all 250+ industries.

The Zacks Industry Rank is ordered 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.

Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.


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