Netflix (NFLX) Weak In Early Morning Trading

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 Netflix ( NFLX) as a pre-market laggard 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 $814.9 million.
  • NFLX traded 64,168 shares today in the pre-market hours as of 9:28 AM.
  • NFLX is down 2.2% today from Friday's close.

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More details on NFLX:

Netflix, Inc. operates as an Internet television network, is engaged in the Internet delivery of TV shows and movies directly on TVs, computers, and mobile devices in the United States and internationally. NFLX has a PE ratio of 144.2. Currently there are 16 analysts that rate Netflix a buy, 4 analysts rate it a sell, and 10 rate it a hold.

The average volume for Netflix has been 2.2 million shares per day over the past 30 days. Netflix has a market cap of $28.9 billion and is part of the services sector and media industry. The stock has a beta of 2.27 and a short float of 9.2% with 3.69 days to cover. Shares are up 29.4% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Netflix as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 7.2%. Since the same quarter one year prior, revenues rose by 25.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 134.69% and other important driving factors, this stock has surged by 58.10% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
  • NETFLIX INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, NETFLIX INC increased its bottom line by earning $1.85 versus $0.29 in the prior year. This year, the market expects an improvement in earnings ($3.88 versus $1.85).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Internet & Catalog Retail industry. The net income increased by 141.0% when compared to the same quarter one year prior, rising from $29.47 million to $71.02 million.
  • The gross profit margin for NETFLIX INC is currently very high, coming in at 81.65%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 5.29% is above that of the industry average.

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