Netflix (NFLX) Stock Sinks As Market Gains: What You Should Know
In the latest trading session, Netflix (NFLX) closed at $311.96, marking a -1.02% move from the previous day. This change lagged the S&P 500's daily gain of 0.07%. Elsewhere, the Dow gained 0.12%, while the tech-heavy Nasdaq lost 1.47%.
Coming into today, shares of the internet video service had lost 13.86% in the past month. In that same time, the Consumer Discretionary sector lost 4.27%, while the S&P 500 lost 2%.
Netflix will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $2.81, down 20.4% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $8.18 billion, up 3.92% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $11.18 per share and revenue of $34.15 billion. These totals would mark changes of +12.36% and +8.02%, respectively, from last year.
Investors might also notice recent changes to analyst estimates for Netflix. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about 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. The Zacks Consensus EPS estimate has moved 0.45% higher 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 28.19. For comparison, its industry has an average Forward P/E of 14.03, which means Netflix is trading at a premium to the group.
Investors should also note that NFLX has a PEG ratio of 1.46 right now. 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. NFLX's industry had an average PEG ratio of 1.46 as of yesterday's close.
The Broadcast Radio and Television industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 219, which puts it in the bottom 14% 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.
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
