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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 $357.32 in the latest trading session, marking a -0.82% move from the prior day. This move lagged the S&P 500's daily gain of 9.38%. At the same time, the Dow added 11.37%, and the tech-heavy Nasdaq gained 8.12%.

Coming into today, shares of the internet video service had lost 2.29% in the past month. In that same time, the Consumer Discretionary sector lost 35.09%, while the S&P 500 lost 32.94%.

Investors will be hoping for strength from NFLX as it approaches its next earnings release, which is expected to be April 21, 2020. In that report, analysts expect NFLX to post earnings of $1.63 per share. This would mark year-over-year growth of 114.47%. Our most recent consensus estimate is calling for quarterly revenue of $5.70 billion, up 26.16% from the year-ago period.

NFLX's full-year Zacks Consensus Estimates are calling for earnings of $6.06 per share and revenue of $24.29 billion. These results would represent year-over-year changes of +46.73% and +20.5%, respectively.

Investors might also notice recent changes to analyst estimates for NFLX. 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.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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. The Zacks Consensus EPS estimate has moved 0.05% higher within the past month. NFLX is holding a Zacks Rank of #2 (Buy) right now.

Investors should also note NFLX's current valuation metrics, including its Forward P/E ratio of 59.45. This represents a premium compared to its industry's average Forward P/E of 5.02.

It is also worth noting that NFLX currently has a PEG ratio of 1.98. 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. Broadcast Radio and Television stocks are, on average, holding a PEG ratio of 0.4 based on yesterday's closing prices.

The Broadcast Radio and Television industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 150, which puts it in the bottom 42% 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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