Back to top

Image: Bigstock

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

Read MoreHide Full Article

In the latest trading session, Netflix (NFLX - Free Report) closed at $429.32, marking a -1.59% move from the previous day. This move lagged the S&P 500's daily gain of 0.24%. At the same time, the Dow lost 0.04%, and the tech-heavy Nasdaq gained 0.43%.

NFLX will be looking to display strength as it nears its next earnings release. On that day, NFLX is projected to report earnings of $1.83 per share, which would represent year-over-year growth of 205%. Our most recent consensus estimate is calling for quarterly revenue of $6.07 billion, up 23.32% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $6.42 per share and revenue of $24.71 billion. These totals would mark changes of +55.45% and +22.59%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for NFLX. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about 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 4.67% higher. 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 67.93. This represents a premium compared to its industry's average Forward P/E of 6.6.

Meanwhile, NFLX's PEG ratio is currently 2.26. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Broadcast Radio and Television was holding an average PEG ratio of 0.61 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 161, putting it in the bottom 37% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Netflix, Inc. (NFLX) - free report >>

Published in