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Netflix (NFLX) Dips More Than Broader Markets: What You Should Know

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In the latest trading session, Netflix (NFLX) closed at $167.54, marking a -1.27% move from the previous day. This change lagged the S&P 500's 0.38% loss on the day. Meanwhile, the Dow lost 0.5%, and the Nasdaq, a tech-heavy index, lost 0.46%.

Prior to today's trading, shares of the internet video service had lost 9.02% over the past month. This has lagged the Consumer Discretionary sector's loss of 7.27% and the S&P 500's loss of 6.69% in that time.

Netflix will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $2.96, down 0.34% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $8.07 billion, up 9.94% from the year-ago period.

NFLX's full-year Zacks Consensus Estimates are calling for earnings of $10.94 per share and revenue of $32.62 billion. These results would represent year-over-year changes of -2.67% and +9.85%, respectively.

Any recent changes to analyst estimates for Netflix 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.

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.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.19% lower. Netflix is currently a Zacks Rank #3 (Hold).

Looking at its valuation, Netflix is holding a Forward P/E ratio of 15.51. This represents a premium compared to its industry's average Forward P/E of 7.21.

Investors should also note that NFLX has a PEG ratio of 0.88 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. Broadcast Radio and Television stocks are, on average, holding a PEG ratio of 0.91 based on yesterday's closing prices.

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 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.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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