Netflix (NFLX) Gains As Market Dips: What You Should Know
In the latest trading session, Netflix (NFLX) closed at $375.50, marking a +1.22% move from the previous day. This move outpaced the S&P 500's daily loss of 1.6%. Elsewhere, the Dow lost 1.84%, while the tech-heavy Nasdaq lost 0.95%.
Coming into today, shares of the internet video service had lost 2.65% in the past month. In that same time, the Consumer Discretionary sector lost 17.58%, while the S&P 500 lost 10.82%.
NFLX will be looking to display strength as it nears its next earnings release, which is expected to be April 21, 2020. In that report, analysts expect NFLX to post earnings of $0.53 per share. This would mark a year-over-year decline of 30.26%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.70 billion, up 26.09% from the year-ago period.
NFLX's full-year Zacks Consensus Estimates are calling for earnings of $6.07 per share and revenue of $24.34 billion. These results would represent year-over-year changes of +46.97% and +20.73%, 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 a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
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. The Zacks Consensus EPS estimate has moved 0.15% higher within the past month. NFLX is holding a Zacks Rank of #2 (Buy) right now.
Valuation is also important, so investors should note that NFLX has a Forward P/E ratio of 61.16 right now. This valuation marks a premium compared to its industry's average Forward P/E of 5.59.
It is also worth noting that NFLX currently has a PEG ratio of 2.04. 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 0.48 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 63, putting it in the top 25% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual 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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