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

·3 min read

In the latest trading session, Netflix (NFLX) closed at $223.56, marking a +1.32% move from the previous day. This move outpaced the S&P 500's daily loss of 0.78%. Elsewhere, the Dow lost 0.88%, while the tech-heavy Nasdaq lost 0.26%.

Heading into today, shares of the internet video service had lost 0.35% over the past month, outpacing the Consumer Discretionary sector's loss of 2.63% and the S&P 500's loss of 3.4% in that time.

Investors will be hoping for strength from Netflix as it approaches its next earnings release. In that report, analysts expect Netflix to post earnings of $2.11 per share. This would mark a year-over-year decline of 33.86%. Our most recent consensus estimate is calling for quarterly revenue of $7.85 billion, up 4.87% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $10.03 per share and revenue of $31.67 billion, which would represent changes of -10.77% and +6.63%, respectively, from the prior year.

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 a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.32% lower. Netflix is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, Netflix is holding a Forward P/E ratio of 22. Its industry sports an average Forward P/E of 8.79, so we one might conclude that Netflix is trading at a premium comparatively.

Meanwhile, NFLX's PEG ratio is currently 1.54. 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 industry currently had an average PEG ratio of 0.72 as of yesterday's close.

The Broadcast Radio and Television industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 217, putting it in the bottom 14% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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