We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Solid Q3 Makes Netflix Pricey: 4 Low-Cost Media Picks
Read MoreHide Full Article
Netflix, Inc. (NFLX - Free Report) notched a fascinating third quarter that no one saw coming. This has encouraged firms to jack up their price targets for Netflix. This steers away small investors who can’t afford large stakes in such companies. Thus, if you have a taste for media stocks and don’t want to burn a hole in your pocket, there are companies trading cheap with solid growth potential.
Impressive Q3 for Netflix
Shares of Netflix jumped 7.1% on Oct 17, courtesy of a stellar earnings beat in the third quarter. The company reported earnings of $1.47 per share that surpassed the Zacks Consensus Estimate by 42 cents and was better than management’s guidance of $1.04. Moreover, earnings jumped a stellar 65.2% on a year-over-year basis.
Though this Los Gatos, CA-based company’s revenues of $5.25 billion have missed the Zacks Consensus Estimate, the metric is up 31% from year-ago levels. What’s more, excluding a negative impact of $137 million related to unfavorable foreign exchange, consolidated revenues grew 35% year over year.
To top it, the streaming giant announced net additions of 6.77 new subscribers in the third quarter. This is indeed a welcome change compared to the second quarter when Netflix had added only 2.7 million, much below the forecasted 5 million. Lest we forget, Netflix is still a leading provider of video streaming content. After all, it has nearly 60.1 million domestic subscribers and 91.5 million international members.
Price Goals Increase for Netflix
The streaming giant’s grand third-quarter show came just in time. Analysts who were lowering their price targets and downgrading the stock post its dismal second quarter, have now adopted a different stance.
Almost 35 analysts are currently offering a 12-month price forecast for Netflix to around a median range of $400, with a high estimate of $451 and a low estimate of $188. But, if we focus on the median target range, it represents a more than 35% increase from Netflix’s last closing price of $293.35.
All these imply that Netflix is a pricey pick for now. Lest we forget, Netflix is already prohibitively expensive in the market with a P/E of 88.57, which is way ahead of the industry average of 4.3 (read more: P/E Ratio: What Is It?)
Netflix’s biggest threat is Amazon.com Inc. (AMZN - Free Report) . When it comes to streaming services, Amazon’s market share is close to Netflix. But, Amazon is expensive as well. The e-commerce giant, in its last trading session, closed at $1,787.48.
Steer Clear of Netflix, Buy These 4 Media Stocks Instead
For those interested in media companies at a budget, it will be wise to pick low-priced stocks with considerable growth potential. We have thus selected four such stocks that also flaunt a Zacks Rank #1 (Strong Buy) or 2 (Buy).
Roku, Inc. (ROKU - Free Report) operates a TV streaming platform. The stock currently has a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings has moved up 50% in the past 60 days. The company’s expected earnings growth for the current year is more than 100%. Roku closed at $139.07 on Oct 17, while Netflix settled at $293.35.
Discovery, Inc. operates as a media company worldwide. The stock currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings has risen 0.3% in the past 60 days. The company’s expected earnings growth for the current year is 71.6%. Discovery closed at $27.89 on Oct 17.
SINA Corporation operates as an online media company in the People's Republic of China and internationally. The stock currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings has climbed 0.8% in the past 60 days. The company’s expected earnings growth for the next year is nearly 21%. SINA closed at $41.32 on Oct 17. You can seethe complete list of today’s Zacks #1 Rank stocks here.
iHeartMedia, Inc. (IHRT - Free Report) operates as a media and entertainment company worldwide. It operates through three segments: iHeartMedia (iHM), Americas Outdoor Advertising (Americas Outdoor), and International Outdoor Advertising (International Outdoor). The stock currently has a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings has moved up 35.2% in the past 60 days. The company’s expected earnings growth for the next year is 2.2%. iHeartMedia closed at $14.50 on Oct 17.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 7 stocks to watch. The report is only available for a limited time.
Image: Bigstock
Solid Q3 Makes Netflix Pricey: 4 Low-Cost Media Picks
Netflix, Inc. (NFLX - Free Report) notched a fascinating third quarter that no one saw coming. This has encouraged firms to jack up their price targets for Netflix. This steers away small investors who can’t afford large stakes in such companies. Thus, if you have a taste for media stocks and don’t want to burn a hole in your pocket, there are companies trading cheap with solid growth potential.
Impressive Q3 for Netflix
Shares of Netflix jumped 7.1% on Oct 17, courtesy of a stellar earnings beat in the third quarter. The company reported earnings of $1.47 per share that surpassed the Zacks Consensus Estimate by 42 cents and was better than management’s guidance of $1.04. Moreover, earnings jumped a stellar 65.2% on a year-over-year basis.
Though this Los Gatos, CA-based company’s revenues of $5.25 billion have missed the Zacks Consensus Estimate, the metric is up 31% from year-ago levels. What’s more, excluding a negative impact of $137 million related to unfavorable foreign exchange, consolidated revenues grew 35% year over year.
To top it, the streaming giant announced net additions of 6.77 new subscribers in the third quarter. This is indeed a welcome change compared to the second quarter when Netflix had added only 2.7 million, much below the forecasted 5 million. Lest we forget, Netflix is still a leading provider of video streaming content. After all, it has nearly 60.1 million domestic subscribers and 91.5 million international members.
Price Goals Increase for Netflix
The streaming giant’s grand third-quarter show came just in time. Analysts who were lowering their price targets and downgrading the stock post its dismal second quarter, have now adopted a different stance.
Almost 35 analysts are currently offering a 12-month price forecast for Netflix to around a median range of $400, with a high estimate of $451 and a low estimate of $188. But, if we focus on the median target range, it represents a more than 35% increase from Netflix’s last closing price of $293.35.
All these imply that Netflix is a pricey pick for now. Lest we forget, Netflix is already prohibitively expensive in the market with a P/E of 88.57, which is way ahead of the industry average of 4.3 (read more: P/E Ratio: What Is It?)
Netflix’s biggest threat is Amazon.com Inc. (AMZN - Free Report) . When it comes to streaming services, Amazon’s market share is close to Netflix. But, Amazon is expensive as well. The e-commerce giant, in its last trading session, closed at $1,787.48.
Steer Clear of Netflix, Buy These 4 Media Stocks Instead
For those interested in media companies at a budget, it will be wise to pick low-priced stocks with considerable growth potential. We have thus selected four such stocks that also flaunt a Zacks Rank #1 (Strong Buy) or 2 (Buy).
Roku, Inc. (ROKU - Free Report) operates a TV streaming platform. The stock currently has a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings has moved up 50% in the past 60 days. The company’s expected earnings growth for the current year is more than 100%. Roku closed at $139.07 on Oct 17, while Netflix settled at $293.35.
Discovery, Inc. operates as a media company worldwide. The stock currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings has risen 0.3% in the past 60 days. The company’s expected earnings growth for the current year is 71.6%. Discovery closed at $27.89 on Oct 17.
SINA Corporation operates as an online media company in the People's Republic of China and internationally. The stock currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings has climbed 0.8% in the past 60 days. The company’s expected earnings growth for the next year is nearly 21%. SINA closed at $41.32 on Oct 17. You can see the complete list of today’s Zacks #1 Rank stocks here.
iHeartMedia, Inc. (IHRT - Free Report) operates as a media and entertainment company worldwide. It operates through three segments: iHeartMedia (iHM), Americas Outdoor Advertising (Americas Outdoor), and International Outdoor Advertising (International Outdoor). The stock currently has a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings has moved up 35.2% in the past 60 days. The company’s expected earnings growth for the next year is 2.2%. iHeartMedia closed at $14.50 on Oct 17.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 7 stocks to watch. The report is only available for a limited time.
See 7 breakthrough stocks now>>