In the latest trading session, Netflix (NFLX - Free Report) closed at $319.96, marking a -0.1% move from the previous day. This change lagged the S&P 500's 0.48% gain on the day. At the same time, the Dow added 0.53%, and the tech-heavy Nasdaq gained 0.8%.
Heading into today, shares of the internet video service had gained 20.71% over the past month, outpacing the Consumer Discretionary sector's gain of 0.15% and the S&P 500's loss of 2.09% in that time.
NFLX will be looking to display strength as it nears its next earnings release, which is expected to be January 17, 2019. The company is expected to report EPS of $0.25, down 39.02% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.21 billion, up 28.05% from the year-ago period.
Investors should also note any recent changes to analyst estimates for NFLX. Recent revisions tend to reflect the latest near-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. 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, 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 moved 0.52% lower. NFLX is holding a Zacks Rank of #3 (Hold) right now.
In terms of valuation, NFLX is currently trading at a Forward P/E ratio of 78.82. Its industry sports an average Forward P/E of 13.8, so we one might conclude that NFLX is trading at a premium comparatively.
Investors should also note that NFLX has a PEG ratio of 2.63 right now. 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 industry currently had an average PEG ratio of 0.89 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 34, putting it in the top 14% 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.
Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.