![]() ![]() In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects. Without considering a stock's valuation, no investment decision can be efficient. The company topped consensus revenue estimates two times over this period. Over the last four quarters, Netflix surpassed consensus EPS estimates three times. EPS of $2.11 for the same period compares with $0.12 a year ago.Ĭompared to the Zacks Consensus Estimate of $8.72 billion, the reported revenues represent a surprise of +1.33%. Netflix reported revenues of $8.83 billion in the last reported quarter, representing a year-over-year change of +12.5%. Last Reported Results and Surprise History For the current and next fiscal years, $38.63 billion and $43.16 billion estimates indicate +14.5% and +11.7% changes, respectively. So, it's important to know a company's potential revenue growth.įor Netflix, the consensus sales estimate for the current quarter of $9.25 billion indicates a year-over-year change of +13.4%. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. While earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. The chart below shows the evolution of the company's forward 12-month consensus EPS estimate: This estimate has changed -0.1% over the last 30 days. ![]() ![]() The consensus earnings estimate of $17.01 for the current fiscal year indicates a year-over-year change of +41.4%. The Zacks Consensus Estimate has changed +1.1% over the last 30 days. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.įor the current quarter, Netflix is expected to post earnings of $4.49 per share, indicating a change of +55.9% from the year-ago quarter. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. And if earnings estimates go up for a company, the fair value for its stock goes up. We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock. Here at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making. Now the key question is: Where could the stock be headed in the near term? The Zacks Broadcast Radio and Television industry, to which Netflix belongs, has lost 0.5% over this period. Shares of this internet video service have returned -0.3% over the past month versus the Zacks S&P 500 composite's +2.2% change. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock. The Company's paid plans range from the United States dollar equivalent of $1 to $28 per month, and pricing on its extra member sub accounts range from the United States dollar equivalent of $2 to $8 per month.Netflix (NFLX) is one of the stocks most watched by visitors lately. The Company also has agreements with various cable, satellite and telecommunications operators to make its service available through TV set-top boxes. The Company offers members the ability to receive streaming content through a host of Internet-connected devices, including TVs, digital video players, TV set-top boxes and mobile devices. Its members can play, pause and resume watching as much as they want, anytime, anywhere, and can change their plans at any time. The Company provides paid memberships in approximately 190 countries offering televis ion (TV) series, films and games across a wide variety of genres and languages. The Company acquires, licenses and produces content, including original programming.
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