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

Zacks Equity Research

Netflix (NFLX) closed the most recent trading day at $330.75, moving -1.51% from the previous trading session. This change lagged the S&P 500's 0.28% loss on the day. Elsewhere, the Dow lost 0.42%, while the tech-heavy Nasdaq lost 0.03%.

Coming into today, shares of the internet video service had gained 11.02% in the past month. In that same time, the Consumer Discretionary sector gained 4.08%, while the S&P 500 gained 3.31%.

Wall Street will be looking for positivity from NFLX as it approaches its next earnings report date. This is expected to be January 21, 2020. In that report, analysts expect NFLX to post earnings of $0.52 per share. This would mark year-over-year growth of 73.33%. Meanwhile, our latest consensus estimate is calling for revenue of $5.44 billion, up 29.92% from the prior-year quarter.

Any recent changes to analyst estimates for NFLX should also be noted by investors. 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.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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. Within the past 30 days, our consensus EPS projection has moved 0.03% lower. NFLX is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, NFLX is holding a Forward P/E ratio of 61.34. This represents a premium compared to its industry's average Forward P/E of 9.57.

Investors should also note that NFLX has a PEG ratio of 2.04 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Broadcast Radio and Television stocks are, on average, holding a PEG ratio of 0.77 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 85, which puts it in the top 34% 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.

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

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Netflix, Inc. (NFLX) : Free Stock Analysis Report
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