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

Netflix (NFLX) closed the most recent trading day at $269.70, moving +1.72% from the previous trading session. The stock outpaced the S&P 500's daily gain of 0.18%. Meanwhile, the Dow gained 0.14%, and the Nasdaq, a tech-heavy index, added 0.74%.

Prior to today's trading, shares of the internet video service had lost 16.6% over the past month. This has lagged the Consumer Discretionary sector's loss of 6.42% and the S&P 500's loss of 6.19% in that time.

NFLX will be looking to display strength as it nears its next earnings release, which is expected to be January 28, 2019. On that day, NFLX is projected to report earnings of $0.24 per share, which would represent a year-over-year decline of 41.46%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.21 billion, up 28.01% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.63 per share and revenue of $15.84 billion, which would represent changes of +110.4% and +35.5%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for NFLX. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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 0.05% higher. NFLX is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that NFLX has a Forward P/E ratio of 100.86 right now. For comparison, its industry has an average Forward P/E of 13.43, which means NFLX is trading at a premium to the group.

Also, we should mention that NFLX has a PEG ratio of 3.36. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Broadcast Radio and Television industry currently had an average PEG ratio of 1.23 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 91, which puts it in the top 35% 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.

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