In the latest trading session, Netflix (NFLX) closed at $288.30, marking a -0.83% move from the previous day. This move was narrower than the S&P 500’s daily loss of 0.9%. Elsewhere, the Dow lost 0.5%, while the tech-heavy Nasdaq lost 0.27%.
Coming into today, shares of the internet video service had gained 0.95% in the past month. In that same time, the Consumer Discretionary sector lost 3.13%, while the S&P 500 lost 2.66%.
Investors will be hoping for strength from Netflix as it approaches its next earnings release, which is expected to be January 19, 2023. The company is expected to report EPS of $0.44, down 66.92% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $7.82 billion, up 1.49% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $10.30 per share and revenue of $31.58 billion, which would represent changes of -8.36% and +6.35%, respectively, from the prior year.
Any recent changes to analyst estimates for Netflix should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company’s business outlook.
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. The Zacks Consensus EPS estimate has moved 0.04% higher within the past month. Netflix is holding a Zacks Rank of #3 (Hold) right now.
Digging into valuation, Netflix currently has a Forward P/E ratio of 28.23. For comparison, its industry has an average Forward P/E of 7.11, which means Netflix is trading at a premium to the group.
Meanwhile, NFLX’s PEG ratio is currently 3.32. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock’s expected earnings growth rate. The Broadcast Radio and Television industry currently had an average PEG ratio of 0.69 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 227, which puts it in the bottom 10% 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.
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