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Netflix (NFLX) Gains But Lags Market: What You Should Know

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In the latest trading session, Netflix (NFLX - Free Report) closed at $355.73, marking a +0.66% move from the previous day. This move lagged the S&P 500's daily gain of 0.82%. Meanwhile, the Dow gained 0.82%, and the Nasdaq, a tech-heavy index, added 0.64%.

Heading into today, shares of the internet video service had lost 4.61% over the past month, outpacing the Consumer Discretionary sector's loss of 5.02% and lagging the S&P 500's loss of 4.58% in that time.

Investors will be hoping for strength from NFLX as it approaches its next earnings release. In that report, analysts expect NFLX to post earnings of $0.56 per share. This would mark a year-over-year decline of 34.12%. Our most recent consensus estimate is calling for quarterly revenue of $4.93 billion, up 26.11% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.31 per share and revenue of $20.18 billion, which would represent changes of +23.51% and +27.78%, respectively, from the prior year.

Any recent changes to analyst estimates for NFLX should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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 0.33% higher. NFLX is holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that NFLX has a Forward P/E ratio of 106.64 right now. This represents a premium compared to its industry's average Forward P/E of 14.4.

Meanwhile, NFLX's PEG ratio is currently 3.55. 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 was holding an average PEG ratio of 1.24 at yesterday's closing price.

The Broadcast Radio and Television industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 87, putting it in the top 34% 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.

To follow NFLX in the coming trading sessions, be sure to utilize Zacks.com.


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