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Netflix (NFLX) Suffers a Larger Drop Than the General Market: Key Insights

The most recent trading session ended with Netflix (NFLX) standing at $635.67, reflecting a -0.75% shift from the previouse trading day's closing. This change lagged the S&P 500's daily loss of 0.74%. On the other hand, the Dow registered a loss of 1.53%, and the technology-centric Nasdaq decreased by 0.39%.

Shares of the internet video service witnessed a gain of 15.38% over the previous month, beating the performance of the Consumer Discretionary sector with its gain of 1.94% and the S&P 500's gain of 6.06%.

Market participants will be closely following the financial results of Netflix in its upcoming release. On that day, Netflix is projected to report earnings of $4.70 per share, which would represent year-over-year growth of 42.86%. At the same time, our most recent consensus estimate is projecting a revenue of $9.53 billion, reflecting a 16.41% rise from the equivalent quarter last year.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $18.31 per share and revenue of $38.7 billion, indicating changes of +52.2% and +14.75%, respectively, compared to the previous year.

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Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for Netflix. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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. Over the past month, the Zacks Consensus EPS estimate has shifted 1.26% upward. At present, Netflix boasts a Zacks Rank of #1 (Strong Buy).

In terms of valuation, Netflix is presently being traded at a Forward P/E ratio of 34.97. This indicates a premium in contrast to its industry's Forward P/E of 8.56.

It's also important to note that NFLX currently trades at a PEG ratio of 1.38. 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. As the market closed yesterday, the Broadcast Radio and Television industry was having an average PEG ratio of 0.91.

The Broadcast Radio and Television industry is part of the Consumer Discretionary sector. With its current Zacks Industry Rank of 47, this industry ranks in the top 19% of all industries, numbering over 250.

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

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Zacks Investment Research