Technology

Netflix (NFLX) Dips More Than Broader Markets: What You Should Know

Netflix (NFLX) closed the most recent trading day at $353.19, moving -1.88% from the previous trading session. This move lagged the S&P 500's daily loss of 0.46%. Elsewhere, the Dow lost 0.13%, while the tech-heavy Nasdaq lost 0.63%.

Coming into today, shares of the internet video service had lost 1.37% in the past month. In that same time, the Consumer Discretionary sector lost 1.8%, while the S&P 500 gained 1.08%.

Investors will be hoping for strength from NFLX as it approaches its next earnings release, which is expected to be April 16, 2019. The company is expected to report EPS of $0.59, down 7.81% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.49 billion, up 21.33% from the year-ago period.

NFLX's full-year Zacks Consensus Estimates are calling for earnings of $4.03 per share and revenue of $20.17 billion. These results would represent year-over-year changes of +50.37% and +27.69%, respectively.

Investors should also note any recent changes to analyst estimates for NFLX. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about 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.

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. The Zacks Consensus EPS estimate has moved 0.33% lower within the past month. NFLX is currently a Zacks Rank #3 (Hold).

Investors should also note NFLX's current valuation metrics, including its Forward P/E ratio of 89.28. This valuation marks a premium compared to its industry's average Forward P/E of 17.66.

We can also see that NFLX currently has a PEG ratio of 2.98. 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. Broadcast Radio and Television stocks are, on average, holding a PEG ratio of 1.07 based on yesterday's closing prices.

The Broadcast Radio and Television industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 66, which puts it in the top 26% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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