Netflix (NFLX) Dips More Than Broader Markets: What You Should Know

·3-min read

Netflix (NFLX) closed at $323.52 in the latest trading session, marking a -1.26% move from the prior day. This move lagged the S&P 500's daily loss of 0.16%. Meanwhile, the Dow lost 0.12%, and the Nasdaq, a tech-heavy index, lost 3.64%.

Prior to today's trading, shares of the internet video service had gained 1.43% over the past month. This has outpaced the Consumer Discretionary sector's loss of 2.9% and the S&P 500's gain of 0.07% in that time.

Investors will be hoping for strength from Netflix as it approaches its next earnings release, which is expected to be April 18, 2023. In that report, analysts expect Netflix to post earnings of $2.81 per share. This would mark a year-over-year decline of 20.4%. Meanwhile, our latest consensus estimate is calling for revenue of $8.18 billion, up 3.92% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $11.27 per share and revenue of $34.27 billion. These totals would mark changes of +13.27% and +8.39%, respectively, from last year.

Investors should also note any 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.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable 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 remained stagnant. Netflix is holding a Zacks Rank of #2 (Buy) right now.

In terms of valuation, Netflix is currently trading at a Forward P/E ratio of 29.07. This represents a premium compared to its industry's average Forward P/E of 11.98.

Meanwhile, NFLX's PEG ratio is currently 1.51. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Broadcast Radio and Television was holding an average PEG ratio of 1.51 at yesterday's closing price.

The Broadcast Radio and Television industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 198, putting it in the bottom 22% of all 250+ industries.

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.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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

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