Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.
Trade-Ideas LLC identified
) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Netflix as such a stock due to the following factors:
- NFLX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $2.3 billion.
- NFLX has traded 2.1 million shares today.
- NFLX is up 3.8% today.
- NFLX was down 9.1% yesterday.
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More details on NFLX:
Netflix, Inc. provides Internet television network service that enables subscribers to stream TV shows and movies directly on TVs, computers, and mobile devices in the United States and internationally. NFLX has a PE ratio of 388.0. Currently there are 4 analysts that rate Netflix a buy, 5 analysts rate it a sell, and 17 rate it a hold.
The average volume for Netflix has been 3.1 million shares per day over the past 30 days. Netflix has a market cap of $18.1 billion and is part of the services sector and specialty retail industry. The stock has a beta of 1.75 and a short float of 16.3% with 1.03 days to cover. Shares are up 231% year to date as of the close of trading on Friday.
rates Netflix as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, premium valuation and generally higher debt management risk.
Highlights from the ratings report include:
- NFLX's revenue growth has slightly outpaced the industry average of 17.6%. Since the same quarter one year prior, revenues rose by 20.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The gross profit margin for NETFLIX INC is currently very high, coming in at 80.03%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 2.75% is above that of the industry average.
- NETFLIX INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, NETFLIX INC reported lower earnings of $0.29 versus $4.17 in the prior year. This year, the market expects an improvement in earnings ($1.46 versus $0.29).
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. When compared to other companies in the Internet & Catalog Retail industry and the overall market, NETFLIX INC's return on equity is below that of both the industry average and the S&P 500.
- You can view the full Netflix Ratings Report.