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Netflix (NFLX) Stock Slides as Market Rises: Facts to Know Before You Trade

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In the latest market close, Netflix (NFLX - Free Report) reached $685.74, with a -0.71% movement compared to the previous day. This change lagged the S&P 500's daily gain of 0.1%. Meanwhile, the Dow experienced a drop of 0.08%, and the technology-dominated Nasdaq saw an increase of 0.28%.

The internet video service's stock has climbed by 7.67% in the past month, exceeding the Consumer Discretionary sector's loss of 0.3% and the S&P 500's gain of 4.08%.

Investors will be eagerly watching for the performance of Netflix in its upcoming earnings disclosure. The company's earnings report is set to be unveiled on July 18, 2024. The company's upcoming EPS is projected at $4.70, signifying a 42.86% increase compared to the same quarter of the previous year. Meanwhile, our latest consensus estimate is calling for revenue of $9.53 billion, up 16.36% from the prior-year quarter.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $18.31 per share and a revenue of $38.75 billion, representing changes of +52.2% and +14.91%, respectively, from the prior year.

Investors might also notice recent changes to 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. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% 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).

In terms of valuation, Netflix is presently being traded at a Forward P/E ratio of 37.71. Its industry sports an average Forward P/E of 7.54, so one might conclude that Netflix is trading at a premium comparatively.

Also, we should mention that NFLX has a PEG ratio of 1.49. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. Broadcast Radio and Television stocks are, on average, holding a PEG ratio of 1.09 based on yesterday's closing prices.

The Broadcast Radio and Television industry is part of the Consumer Discretionary sector. Currently, this industry holds a Zacks Industry Rank of 170, positioning it in the bottom 33% of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained 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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