In the latest trading session, Netflix (NFLX) closed at $281.17, marking a -1.53% move from the previous day. This move was narrower than the S&P 500’s daily loss of 1.54%. Elsewhere, the Dow lost 1.45%, while the tech-heavy Nasdaq lost 0.16%.
Coming into today, shares of the internet video service had lost 3.44% in the past month. In that same time, the Consumer Discretionary sector gained 6.36%, while the S&P 500 gained 4.54%.
Netflix will be looking to display strength as it nears its next earnings release. In that report, analysts expect Netflix to post earnings of $0.49 per share. This would mark a year-over-year decline of 63.16%. Meanwhile, our latest consensus estimate is calling for revenue of $7.85 billion, up 1.83% from the prior-year quarter.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $10.27 per share and revenue of $31.58 billion. These totals would mark changes of -8.63% and +6.34%, respectively, from last year.
Investors might also notice recent changes to analyst estimates for Netflix. These revisions typically reflect the latest short-term business trends, which can change frequently. 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.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.03% higher. Netflix is holding a Zacks Rank of #3 (Hold) right now.
Valuation is also important, so investors should note that Netflix has a Forward P/E ratio of 27.8 right now. This valuation marks a premium compared to its industry’s average Forward P/E of 7.75.
It is also worth noting that NFLX currently has a PEG ratio of 3.26. 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 0.71 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 221, putting it in the bottom 13% 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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