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

In the latest trading session, Netflix (NFLX) closed at $399.29, marking a -1.05% move from the previous day. This change lagged the S&P 500's 0.24% gain on the day. At the same time, the Dow added 0.03%, and the tech-heavy Nasdaq gained 5.73%.

Heading into today, shares of the internet video service had gained 21.84% over the past month, outpacing the Consumer Discretionary sector's loss of 2.05% and the S&P 500's gain of 3.56% in that time.

Wall Street will be looking for positivity from Netflix as it approaches its next earnings report date. On that day, Netflix is projected to report earnings of $2.79 per share, which would represent a year-over-year decline of 12.81%. Meanwhile, our latest consensus estimate is calling for revenue of $8.24 billion, up 3.4% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $11.14 per share and revenue of $33.77 billion, which would represent changes of +11.96% and +6.82%, respectively, from the prior year.

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Investors might also notice recent changes to analyst estimates for Netflix. 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.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

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. Within the past 30 days, our consensus EPS projection has moved 0.41% lower. Netflix is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, Netflix is holding a Forward P/E ratio of 36.21. Its industry sports an average Forward P/E of 12.48, so we one might conclude that Netflix is trading at a premium comparatively.

It is also worth noting that NFLX currently has a PEG ratio of 1.61. 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 was holding an average PEG ratio of 1.48 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 155, putting it in the bottom 39% 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.

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

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Netflix, Inc. (NFLX) : Free Stock Analysis Report

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