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

Netflix (NFLX) closed at $321.99 in the latest trading session, marking a -0.97% move from the prior day. This change lagged the S&P 500's 0.22% gain on the day. Meanwhile, the Dow gained 0.7%, and the Nasdaq, a tech-heavy index, added 0.08%.

Coming into today, shares of the internet video service had gained 39.03% in the past month. In that same time, the Consumer Discretionary sector gained 10.35%, while the S&P 500 gained 9.27%.

Investors will be hoping for strength from NFLX as it approaches its nex t earnings release, which is expected to be April 15, 2019. On that day, NFLX is projected to report earnings of $0.58 per share, which would represent a year-over-year decline of 9.38%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.49 billion, up 21.29% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.04 per share and revenue of $20.12 billion, which would represent changes of +50.75% and +27.38%, respectively, from the prior year.

Any recent changes to analyst estimates for NFLX should also be noted by investors. 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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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. Within the past 30 days, our consensus EPS projection has moved 0.58% lower. NFLX currently has a Zacks Rank of #3 (Hold).

Digging into valuation, NFLX currently has a Forward P/E ratio of 80.42. For comparison, its industry has an average Forward P/E of 13.65, which means NFLX is trading at a premium to the group.

Meanwhile, NFLX's PEG ratio is currently 2.68. 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. NFLX's industry had an average PEG ratio of 0.95 as of yesterday's close.

The Broadcast Radio and Television industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 66, putting it in the top 26% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.


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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