Netflix (NFLX) closed the most recent trading day at $83.33, moving -2.94% from the previous trading session. The stock trailed the S&P 500, which registered a daily gain of 0.13%. Elsewhere, the Dow saw an upswing of 0.45%, while the tech-heavy Nasdaq appreciated by 0.03%.
Coming into today, shares of the internet video service had lost 5.68% in the past month. In that same time, the Consumer Discretionary sector gained 0.41%, while the S&P 500 gained 5.25%.
Market participants will be closely following the financial results of Netflix in its upcoming release. The company's earnings per share (EPS) are projected to be $0.79, reflecting a 9.72% increase from the same quarter last year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $12.57 billion, up 13.48% from the year-ago period.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $3.6 per share and revenue of $51.41 billion. These totals would mark changes of +42.29% and +13.77%, respectively, from last year.
It is also important to note the recent changes to analyst estimates for Netflix. Recent revisions tend to reflect the latest near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional 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 1% higher. Netflix presently features a Zacks Rank of #3 (Hold).
In the context of valuation, Netflix is at present trading with a Forward P/E ratio of 23.86. For comparison, its industry has an average Forward P/E of 14.6, which means Netflix is trading at a premium to the group.
One should further note that NFLX currently holds a PEG ratio of 1.09. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. As the market closed yesterday, the Broadcast Radio and Television industry was having an average PEG ratio of 1.09.
The Broadcast Radio and Television industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 109, putting it in the top 45% of all 250+ industries.
The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
To follow NFLX in the coming trading sessions, be sure to utilize Zacks.com.
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Netflix, Inc. (NFLX): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).