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

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Netflix (NFLX - Free Report) closed at $297.81 in the latest trading session, marking a -0.39% move from the prior day. This move lagged the S&P 500's daily gain of 0.83%. Meanwhile, the Dow gained 0.93%, and the Nasdaq, a tech-heavy index, added 0.9%.

Coming into today, shares of the internet video service had lost 2.7% in the past month. In that same time, the Consumer Discretionary sector lost 4.47%, while the S&P 500 lost 2.38%.

Wall Street will be looking for positivity from NFLX as it approaches its next earnings report date. On that day, NFLX is projected to report earnings of $1.05 per share, which would represent year-over-year growth of 17.98%. Meanwhile, our latest consensus estimate is calling for revenue of $5.25 billion, up 31.34% from the prior-year quarter.

NFLX's full-year Zacks Consensus Estimates are calling for earnings of $3.26 per share and revenue of $20.22 billion. These results would represent year-over-year changes of +21.64% and +28.01%, respectively.

Any recent changes to analyst estimates for NFLX should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. 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. Within the past 30 days, our consensus EPS projection has moved 0.52% lower. NFLX is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note NFLX's current valuation metrics, including its Forward P/E ratio of 91.63. For comparison, its industry has an average Forward P/E of 14.28, which means NFLX is trading at a premium to the group.

Investors should also note that NFLX has a PEG ratio of 3.05 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. NFLX's industry had an average PEG ratio of 1.28 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 168, putting it in the bottom 35% 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.

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


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