In the latest close session, Netflix (NFLX) was down 1.99% at $79.84. The stock's change was less than the S&P 500's daily gain of 0.72%. At the same time, the Dow added 0.2%, and the tech-heavy Nasdaq gained 1.57%.
Prior to today's trading, shares of the internet video service had gained 10.63% outpaced the Consumer Discretionary sector's gain of 7.19% and the S&P 500's gain of 3.68%.
The upcoming earnings release of Netflix will be of great interest to investors. In that report, analysts expect Netflix to post earnings of $0.82 per share. This would mark year-over-year growth of 38.98%. In the meantime, our current consensus estimate forecasts the revenue to be $12.88 billion, indicating a 11.9% growth compared to the corresponding quarter of the prior year.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $3.59 per share and revenue of $51.25 billion. These totals would mark changes of +41.9% and +13.42%, respectively, from last year.
Any recent changes to analyst estimates for Netflix should also be noted by investors. These latest adjustments often mirror the shifting dynamics of short-term business patterns. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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, there's been no change in the Zacks Consensus EPS estimate. Currently, Netflix is carrying a Zacks Rank of #3 (Hold).
With respect to valuation, Netflix is currently being traded at a Forward P/E ratio of 22.67. This indicates a premium in contrast to its industry's Forward P/E of 11.72.
Investors should also note that NFLX has a PEG ratio of 1.02 right now. 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 1.02.
The Broadcast Radio and Television industry is part of the Consumer Discretionary sector. With its current Zacks Industry Rank of 157, this industry ranks in the bottom 37% of all industries, numbering over 250.
The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.
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Netflix, Inc. (NFLX): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).