Netflix (NFLX) Stock Sinks As Market Gains: What You Should Know
In the latest trading session, Netflix (NFLX) closed at $282.83, marking a -0.71% move from the previous day. This change lagged the S&P 500's daily gain of 1.29%. Elsewhere, the Dow gained 1.55%, while the tech-heavy Nasdaq added 1.27%.
Investors will be hoping for strength from NFLX as it approaches its next earnings release, which is expected to be January 28, 2019. In that report, analysts expect NFLX to post earnings of $0.24 per share. This would mark a year-over-year decline of 41.46%. Meanwhile, our latest consensus estimate is calling for revenue of $4.20 billion, up 27.97% from the prior-year quarter.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.61 per share and revenue of $15.84 billion. These totals would mark changes of +108.8% and +35.49%, respectively, from last year.
Investors should also note any recent changes to analyst estimates for NFLX. 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.
Our research shows that these estimate changes are directly correlated with near-term stock prices. 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. Over the past month, the Zacks Consensus EPS estimate has moved 1.43% lower. NFLX is currently sporting a Zacks Rank of #3 (Hold).
Investors should also note NFLX's current valuation metrics, including its Forward P/E ratio of 108.25. This valuation marks a premium compared to its industry's average Forward P/E of 12.08.
Meanwhile, NFLX's PEG ratio is currently 3.61. 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 0.86 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 69, which puts it in the top 27% 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.
You can find more information on all of these metrics, and much more, on Zacks.com.
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