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Netflix (NFLX) Gains But Lags Market: What You Should Know

In the latest trading session, Netflix (NFLX) closed at $305.79, marking a +0.22% move from the previous day. This move lagged the S&P 500's daily gain of 1.3%. Elsewhere, the Dow gained 0.98%, while the tech-heavy Nasdaq added 7.48%.

Prior to today's trading, shares of the internet video service had lost 12.31% over the past month. This has lagged the Consumer Discretionary sector's loss of 7.25% and the S&P 500's loss of 2.95% in that time.

Netflix will be looking to display strength as it nears its next earnings release, which is expected to be April 18, 2023. The company is expected to report EPS of $2.81, down 20.4% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $8.18 billion, up 3.92% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $11.27 per share and revenue of $34.15 billion, which would represent changes of +13.27% and +8.02%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for Netflix. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Netflix is currently a Zacks Rank #2 (Buy).

In terms of valuation, Netflix is currently trading at a Forward P/E ratio of 27.08. This represents a premium compared to its industry's average Forward P/E of 11.65.

We can also see that NFLX currently has a PEG ratio of 1.41. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Broadcast Radio and Television was holding an average PEG ratio of 1.41 at yesterday's closing price.

The Broadcast Radio and Television industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 178, which puts it in the bottom 30% of all 250+ industries.

The Zacks Industry Rank includes is listed in order 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 follow all of these stock-moving metrics, and many more, on Zacks.com.

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

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Zacks Investment Research