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Netflix (NFLX) Gains As Market Dips: What You Should Know

Zacks Equity Research
·3 mins read

Netflix (NFLX) closed the most recent trading day at $541.94, moving +0.09% from the previous trading session. This move outpaced the S&P 500's daily loss of 0.15%. Elsewhere, the Dow lost 0.07%, while the tech-heavy Nasdaq lost 0.47%.

Coming into today, shares of the internet video service had gained 11.9% in the past month. In that same time, the Consumer Discretionary sector gained 2.1%, while the S&P 500 gained 3.19%.

Investors will be hoping for strength from NFLX as it approaches its next earnings release, which is expected to be October 20, 2020. The company is expected to report EPS of $2.12, up 44.22% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $6.38 billion, up 21.7% from the prior-year quarter.

NFLX's full-year Zacks Consensus Estimates are calling for earnings of $6.27 per share and revenue of $24.85 billion. These results would represent year-over-year changes of +51.82% and +23.31%, respectively.

Investors might also notice recent changes to analyst estimates for NFLX. These revisions help to show the ever-changing nature of near-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. Within the past 30 days, our consensus EPS projection has moved 0.16% lower. NFLX currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that NFLX has a Forward P/E ratio of 86.37 right now. This represents a premium compared to its industry's average Forward P/E of 8.83.

It is also worth noting that NFLX currently has a PEG ratio of 2.88. 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 0.62 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 107, putting it in the top 43% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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