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Netflix (NFLX) Stock Flat Ahead of Earnings: What to Expect
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Shares of Netflix (NFLX - Free Report) added about 0.3% in morning trading Monday, just hours before the video streaming giant is set to release its second-quarter earnings report.
U.S. stocks were down in general, and Netflix straddled its Friday close after performing sluggishly over the past few days as investors have grown weary of its sky-high expectations. The stock is still up over 100% since the start of the year, so this certainly makes some sense.
Netflix has led the FAANG group throughout 2018, cruising through periods of market-wide volatility with ease. But some on Wall Street have started to suggest that there is simply no way that the stock can continue moving at the same pace. Let’s take a closer look.
Earnings Outlook
Netflix will release its Q2 fiscal 2018 results shortly after the market closes today. Here’s what analysts are expecting, according to our Zacks Consensus Estimates:
Earnings: Netflix is projected to see adjusted earnings of $0.79 per share, which would represent year-over-year growth of 427%.
Estimate Revisions: The video streaming company has seen one downward earnings estimate revision within the past week. The Zacks Consensus Estimate now sits a penny lower than where it stood just seven days ago.
Revenue: Consensus estimates have Netflix’s Q2 revenue pegged at $3.94 billion. This would mark growth of 41% from the year-ago period.
Subscriber Growth: Our exclusive non-financial metric estimates are calling for Netflix to report 73.3 million international streaming subscribers and 57.9 million domestic members. This would bring its total to 131.2 million subscribers, which is in line with the company’s own forecast.
Valuation
Netflix is trading at about 102x forward 12-month earnings heading into its report. This is a slight premium compared to its 52-week median earnings multiple of 97.4x. Over the past year, the stock has traded as high as 161.8x and as low as 81.1x.
Bottom Line
Netflix is trading with a stretched valuation and riding a year of remarkable momentum into its earnings report. This means expectations will be high, and as we have seen over the past few trading sessions, some investors are choosing to sit the announcement out based on this factor.
Nevertheless, Netflix has proven its ability to surprise in the past. Investors should keep a close eye on Zacks.com for more news and analysis after Netflix posts its results!
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Image: Bigstock
Netflix (NFLX) Stock Flat Ahead of Earnings: What to Expect
Shares of Netflix (NFLX - Free Report) added about 0.3% in morning trading Monday, just hours before the video streaming giant is set to release its second-quarter earnings report.
U.S. stocks were down in general, and Netflix straddled its Friday close after performing sluggishly over the past few days as investors have grown weary of its sky-high expectations. The stock is still up over 100% since the start of the year, so this certainly makes some sense.
Netflix has led the FAANG group throughout 2018, cruising through periods of market-wide volatility with ease. But some on Wall Street have started to suggest that there is simply no way that the stock can continue moving at the same pace. Let’s take a closer look.
Earnings Outlook
Netflix will release its Q2 fiscal 2018 results shortly after the market closes today. Here’s what analysts are expecting, according to our Zacks Consensus Estimates:
Earnings: Netflix is projected to see adjusted earnings of $0.79 per share, which would represent year-over-year growth of 427%.
Estimate Revisions: The video streaming company has seen one downward earnings estimate revision within the past week. The Zacks Consensus Estimate now sits a penny lower than where it stood just seven days ago.
Revenue: Consensus estimates have Netflix’s Q2 revenue pegged at $3.94 billion. This would mark growth of 41% from the year-ago period.
Subscriber Growth: Our exclusive non-financial metric estimates are calling for Netflix to report 73.3 million international streaming subscribers and 57.9 million domestic members. This would bring its total to 131.2 million subscribers, which is in line with the company’s own forecast.
Valuation
Netflix is trading at about 102x forward 12-month earnings heading into its report. This is a slight premium compared to its 52-week median earnings multiple of 97.4x. Over the past year, the stock has traded as high as 161.8x and as low as 81.1x.
Bottom Line
Netflix is trading with a stretched valuation and riding a year of remarkable momentum into its earnings report. This means expectations will be high, and as we have seen over the past few trading sessions, some investors are choosing to sit the announcement out based on this factor.
Nevertheless, Netflix has proven its ability to surprise in the past. Investors should keep a close eye on Zacks.com for more news and analysis after Netflix posts its results!
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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