In the latest trading session, Netflix (NFLX) closed at $310.48, marking a -0.39% move from the previous day. This move lagged the S&P 500's daily gain of 0.22%. Meanwhile, the Dow gained 0.39%, and the Nasdaq, a tech-heavy index, added 0.16%.
Coming into today, shares of the internet video service had gained 14.8% in the past month. In that same time, the Consumer Discretionary sector gained 3.5%, while the S&P 500 gained 3.42%.
NFLX will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.52, up 73.33% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.44 billion, up 29.92% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $3.35 per share and revenue of $20.13 billion, which would represent changes of +25% and +27.44%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for NFLX. Recent revisions tend to reflect the latest 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. 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. Within the past 30 days, our consensus EPS projection has moved 0.02% lower. NFLX is holding a Zacks Rank of #3 (Hold) right now.
In terms of valuation, NFLX is currently trading at a Forward P/E ratio of 93.13. For comparison, its industry has an average Forward P/E of 13.22, which means NFLX is trading at a premium to the group.
We can also see that NFLX currently has a PEG ratio of 3.1. 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. The Broadcast Radio and Television industry currently had an average PEG ratio of 1.24 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 102, putting it in the top 40% 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.
To follow NFLX in the coming trading sessions, be sure to utilize Zacks.com.