Back to top

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

Read MoreHide Full Article

Netflix (NFLX - Free Report) closed the most recent trading day at $366.96, moving -0.18% from the previous trading session. This move lagged the S&P 500's daily gain of 0.13%. Meanwhile, the Dow gained 0.61%, and the Nasdaq, a tech-heavy index, lost 0.08%.

Coming into today, shares of the internet video service had gained 8.77% in the past month. In that same time, the Consumer Discretionary sector gained 3.17%, while the S&P 500 gained 2.1%.

NFLX will be looking to display strength as it nears its next earnings release, which is expected to be October 16, 2018. The company is expected to report EPS of $0.68, up 134.48% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $3.99 billion, up 33.65% from the year-ago period.

NFLX's full-year Zacks Consensus Estimates are calling for earnings of $2.67 per share and revenue of $15.87 billion. These results would represent year-over-year changes of +113.6% and +35.72%, 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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.79% lower within the past month. 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 137.73 right now. For comparison, its industry has an average Forward P/E of 11.47, which means NFLX is trading at a premium to the group.

It is also worth noting that NFLX currently has a PEG ratio of 4.59. 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 0.95 at yesterday's closing price.

The Broadcast Radio and Television industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 111, which puts it in the top 44% 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 >>

More from Zacks Tale of the Tape

You May Like