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

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In the latest market close, Netflix (NFLX - Free Report) reached $573.35, with a -0.31% movement compared to the previous day. The stock's performance was behind the S&P 500's daily gain of 0.13%. Elsewhere, the Dow gained 0.13%, while the tech-heavy Nasdaq lost 0.32%.

Shares of the internet video service witnessed a gain of 16.85% over the previous month, beating the performance of the Consumer Discretionary sector with its gain of 2.42% and the S&P 500's gain of 2.99%.

Investors will be eagerly watching for the performance of Netflix in its upcoming earnings disclosure. The company is forecasted to report an EPS of $4.41, showcasing a 53.13% upward movement from the corresponding quarter of the prior year. Meanwhile, the latest consensus estimate predicts the revenue to be $9.25 billion, indicating a 13.35% increase compared to the same quarter of the previous year.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $16.93 per share and a revenue of $38.54 billion, indicating changes of +40.73% and +14.27%, respectively, from the former year.

It is also important to note the recent changes to analyst estimates for Netflix. Such recent modifications usually signify the changing landscape of near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational 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. Over the past month, the Zacks Consensus EPS estimate has shifted 5.29% upward. Right now, Netflix possesses a Zacks Rank of #1 (Strong Buy).

Investors should also note Netflix's current valuation metrics, including its Forward P/E ratio of 33.97. Its industry sports an average Forward P/E of 9.38, so one might conclude that Netflix is trading at a premium comparatively.

It's also important to note that NFLX currently trades at a PEG ratio of 1.57. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The average PEG ratio for the Broadcast Radio and Television industry stood at 0.61 at the close of the market yesterday.

The Broadcast Radio and Television industry is part of the Consumer Discretionary sector. With its current Zacks Industry Rank of 101, this industry ranks in the top 41% of all industries, numbering over 250.

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.

Make sure to utilize to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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