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

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Netflix (NFLX - Free Report) closed at $290.30 in the latest trading session, marking a +1.46% move from the prior day. The stock outpaced the S&P 500's daily gain of 1.09%. At the same time, the Dow added 1.13%, and the tech-heavy Nasdaq gained 1.51%.

Coming into today, shares of the internet video service had lost 9.85% in the past month. In that same time, the Consumer Discretionary sector gained 0.47%, while the S&P 500 gained 1.92%.

Investors will be hoping for strength from NFLX as it approaches its next earnings release, which is expected to be January 28, 2019. In that report, analysts expect NFLX to post earnings of $0.24 per share. This would mark a year-over-year decline of 41.46%. Our most recent consensus estimate is calling for quarterly revenue of $4.21 billion, up 28.01% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.63 per share and revenue of $15.84 billion. These totals would mark changes of +110.4% and +35.5%, respectively, from last year.

Investors should also note any 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.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.

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 0.07% higher. NFLX currently has a Zacks Rank of #3 (Hold).

Digging into valuation, NFLX currently has a Forward P/E ratio of 108.85. For comparison, its industry has an average Forward P/E of 14.19, which means NFLX is trading at a premium to the group.

Investors should also note that NFLX has a PEG ratio of 3.63 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Broadcast Radio and Television industry currently had an average PEG ratio of 0.98 as of yesterday's close.

The Broadcast Radio and Television industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 52, putting it in the top 20% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.




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