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

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In the latest trading session, Netflix (NFLX - Free Report) closed at $465.91, marking a +1.76% move from the previous day. This move outpaced the S&P 500's daily gain of 1.1%. Meanwhile, the Dow gained 1.18%, and the Nasdaq, a tech-heavy index, added 1.09%.

Investors will be hoping for strength from NFLX as it approaches its next earnings release, which is expected to be July 16, 2020. The company is expected to report EPS of $1.83, up 205% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $6.07 billion, up 23.37% from the year-ago period.

NFLX's full-year Zacks Consensus Estimates are calling for earnings of $6.43 per share and revenue of $24.73 billion. These results would represent year-over-year changes of +55.69% and +22.69%, respectively.

Any recent changes to analyst estimates for NFLX should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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.

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. Within the past 30 days, our consensus EPS projection has moved 0.04% higher. NFLX is holding a Zacks Rank of #3 (Hold) right now.

Investors should also note NFLX's current valuation metrics, including its Forward P/E ratio of 71.26. For comparison, its industry has an average Forward P/E of 7.19, which means NFLX is trading at a premium to the group.

We can also see that NFLX currently has a PEG ratio of 2.38. 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 industry currently had an average PEG ratio of 0.65 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 102, putting it in the top 41% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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