Netflix (NFLX) Gains But Lags Market: What You Should Know

Netflix (NFLX) closed at $191.40 in the latest trading session, marking a +1.9% move from the prior day. This change lagged the S&P 500's 1.99% gain on the day. At the same time, the Dow added 1.61%, and the tech-heavy Nasdaq gained 0.06%.

Prior to today's trading, shares of the internet video service had lost 0.38% over the past month. This has was narrower than the Consumer Discretionary sector's loss of 9.87% and the S&P 500's loss of 7.24% in that time.

Netflix will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $3, up 1.01% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $8.07 billion, up 9.94% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $11.07 per share and revenue of $32.62 billion, which would represent changes of -1.51% and +9.85%, respectively, from the prior 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. 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. 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, 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. Within the past 30 days, our consensus EPS projection has moved 0.1% lower. Netflix currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that Netflix has a Forward P/E ratio of 16.96 right now. Its industry sports an average Forward P/E of 7.98, so we one might conclude that Netflix is trading at a premium comparatively.

We can also see that NFLX currently has a PEG ratio of 0.96. 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. Broadcast Radio and Television stocks are, on average, holding a PEG ratio of 0.96 based on yesterday's closing prices.

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.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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