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

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Netflix (NFLX) closed at $547.58 in the latest trading session, marking a -1.05% move from the prior day. This change lagged the S&P 500's 0.22% gain on the day.

Heading into today, shares of the internet video service had gained 6.65% over the past month, outpacing the Consumer Discretionary sector's gain of 0.85% and the S&P 500's gain of 1.86% in that time.

Investors will be hoping for strength from NFLX as it approaches its next earnings release. On that day, NFLX is projected to report earnings of $2.57 per share, which would represent year-over-year growth of 47.7%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $7.48 billion, up 16.19% from the year-ago period.

NFLX's full-year Zacks Consensus Estimates are calling for earnings of $10.40 per share and revenue of $29.67 billion. These results would represent year-over-year changes of +71.05% and +18.71%, respectively.

Investors should also note any 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.

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 0.11% higher. NFLX is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, NFLX is holding a Forward P/E ratio of 53.22. Its industry sports an average Forward P/E of 16.35, so we one might conclude that NFLX is trading at a premium comparatively.

Also, we should mention that NFLX has a PEG ratio of 1.74. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Broadcast Radio and Television stocks are, on average, holding a PEG ratio of 1.35 based on yesterday's closing prices.

The Broadcast Radio and Television industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 118, which puts it in the top 47% 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.

To follow NFLX in the coming trading sessions, be sure to utilize Zacks.com.


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