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Netflix (NFLX) Gains But Lags Market: What You Should Know

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Netflix (NFLX) closed the most recent trading day at $593.26, moving +0.44% from the previous trading session. The stock lagged the S&P 500's daily gain of 1.21%.

Prior to today's trading, shares of the internet video service had gained 7.87% over the past month. This has outpaced the Consumer Discretionary sector's gain of 0.69% and the S&P 500's loss of 0.9% in that time.

Wall Street will be looking for positivity from NFLX as it approaches its next earnings report date. This is expected to be October 19, 2021. The company is expected to report EPS of $2.57, up 47.7% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $7.48 billion, up 16.26% from the year-ago period.

NFLX's full-year Zacks Consensus Estimates are calling for earnings of $10.38 per share and revenue of $29.68 billion. These results would represent year-over-year changes of +70.72% and +18.74%, respectively.

It is also important to note the recent changes to analyst estimates for NFLX. 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 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. The Zacks Consensus EPS estimate remained stagnant within the past month. NFLX is holding a Zacks Rank of #4 (Sell) right now.

Looking at its valuation, NFLX is holding a Forward P/E ratio of 56.92. For comparison, its industry has an average Forward P/E of 15.88, which means NFLX is trading at a premium to the group.

Investors should also note that NFLX has a PEG ratio of 1.86 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. The Broadcast Radio and Television was holding an average PEG ratio of 1.4 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 128, putting it in the top 50% 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.

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

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