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Strength Seen in Netflix (NFLX): Can Its 9.0% Jump Turn into More Strength?

Zacks Equity Research
·2-min read

Netflix NFLX shares rallied 9% in the last trading session to close at $320.37. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 12.2% loss over the past four weeks.

Netflix's strong portfolio is helping it to face stiff competition in the saturated streaming space. The streaming giant is also expanding games portfolio in order to keep subscribers engaged.

This internet video service is expected to post quarterly earnings of $2.81 per share in its upcoming report, which represents a year-over-year change of -20.4%. Revenues are expected to be $8.18 billion, up 3.9% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

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For Netflix, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on NFLX going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Netflix is a member of the Zacks Broadcast Radio and Television industry. One other stock in the same industry, AMC Networks AMCX, finished the last trading session 1.4% higher at $16.19. AMCX has returned -33.1% over the past month.

AMC Networks' consensus EPS estimate for the upcoming report has changed -11.7% over the past month to $1.81. Compared to the company's year-ago EPS, this represents a change of -28.7%. AMC Networks currently boasts a Zacks Rank of #3 (Hold).

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

AMC Networks Inc. (AMCX) : Free Stock Analysis Report

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Zacks Investment Research