Netflix (NFLX) closed the most recent trading day at $508.05, moving +1.03% from the previous trading session. This change lagged the S&P 500’s 1.66% gain on the day. Elsewhere, the Dow gained 1.39%, while the tech-heavy Nasdaq added 1.24%.
Prior to today’s trading, shares of the internet video service had lost 8.02% over the past month. This has lagged the Consumer Discretionary sector’s loss of 0.71% and the S&P 500’s gain of 1.91% in that time.
Wall Street will be looking for positivity from NFLX as it approaches its next earnings report date. This is expected to be April 20, 2021. The company is expected to report EPS of $2.98, up 89.81% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $7.14 billion, up 23.71% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $9.81 per share and revenue of $29.9 billion, which would represent changes of +61.35% and +19.6%, respectively, from the prior year.
Investors might also notice recent changes to analyst estimates for NFLX. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company’s business and profitability.
Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
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. Over the past month, the Zacks Consensus EPS estimate has moved 0.03% lower. NFLX is currently a Zacks Rank #3 (Hold).
In terms of valuation, NFLX is currently trading at a Forward P/E ratio of 51.27. This represents a premium compared to its industry’s average Forward P/E of 17.82.
Investors should also note that NFLX has a PEG ratio of 1.78 right now. 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 industry currently had an average PEG ratio of 1.43 as of yesterday’s close.
The Broadcast Radio and Television industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 145, which puts it in the bottom 44% 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.
You can find more information on all of these metrics, and much more, on Zacks.com.
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