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Netflix (NFLX) ended the recent trading session at $973.70, demonstrating a -0.7% swing from the preceding day's closing price. This change was narrower than the S&P 500's 1.76% loss on the day. Meanwhile, the Dow lost 1.48%, and the Nasdaq, a tech-heavy index, lost 2.64%.
Prior to today's trading, shares of the internet video service had gained 0.39% over the past month. This has outpaced the Consumer Discretionary sector's loss of 0.24% and the S&P 500's loss of 1.26% in that time.
The investment community will be closely monitoring the performance of Netflix in its forthcoming earnings report. The company is predicted to post an EPS of $5.73, indicating an 8.52% growth compared to the equivalent quarter last year. Our most recent consensus estimate is calling for quarterly revenue of $10.53 billion, up 12.36% from the year-ago period.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $24.58 per share and revenue of $44.43 billion. These totals would mark changes of +23.95% and +13.92%, respectively, from last year.
Investors should also pay attention to any latest changes in analyst estimates for Netflix. These recent revisions tend to reflect the evolving nature of short-term business trends. 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. 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, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the past month, there's been no change in the Zacks Consensus EPS estimate. Right now, Netflix possesses a Zacks Rank of #2 (Buy).
In the context of valuation, Netflix is at present trading with a Forward P/E ratio of 39.9. This signifies a premium in comparison to the average Forward P/E of 12.37 for its industry.
Also, we should mention that NFLX has a PEG ratio of 2.03. 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. The average PEG ratio for the Broadcast Radio and Television industry stood at 1.01 at the close of the market yesterday.
The Broadcast Radio and Television industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 85, which puts it in the top 34% of all 250+ industries.