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Netflix (NFLX) Outpaces Stock Market Gains: What You Should Know

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In the latest trading session, Netflix (NFLX) closed at $175.51, marking a +1.25% move from the previous day. The stock outpaced the S&P 500's daily gain of 0.22%. Meanwhile, the Dow lost 0.13%, and the Nasdaq, a tech-heavy index, added 0.22%.

Coming into today, shares of the internet video service had lost 5.82% in the past month. In that same time, the Consumer Discretionary sector lost 10.16%, while the S&P 500 lost 10.02%.

Wall Street will be looking for positivity from Netflix as it approaches its next earnings report date. This is expected to be July 19, 2022. On that day, Netflix is projected to report earnings of $2.96 per share, which would represent a year-over-year decline of 0.34%. Our most recent consensus estimate is calling for quarterly revenue of $8.07 billion, up 9.94% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $10.94 per share and revenue of $32.62 billion. These totals would mark changes of -2.67% and +9.85%, respectively, from last 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 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 has moved 0.19% lower within the past month. Netflix currently has a Zacks Rank of #3 (Hold).

In terms of valuation, Netflix is currently trading at a Forward P/E ratio of 16.04. Its industry sports an average Forward P/E of 7.03, so we one might conclude that Netflix is trading at a premium comparatively.

We can also see that NFLX currently has a PEG ratio of 0.91. 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 0.93 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 99, putting it in the top 40% 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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