Netflix Inc. [NASDAQ:NFLX] shares are showing some interesting activity. The company’s daily low is at $515.815 as the high is reaching $536.49.
If readers are not familiar, Netflix Inc. is in the Communication Services sector under the Entertainment industry. This week, we are watching the stock hit price per sales of 10.93 with an earning per share of 5.65.
As a reference point, the S&P 500 is trading 0.55% over the last 52 weeks, while NFLX stock is trading 97.50%.
The Bears are coming
Holding a Market Cap of $247.25 billion, Netflix Inc. has seen a trading range over the last year of $264.57-$575.37.
For the last five days, NFLX is up from its last closing price. The average shares trading hands each day is 7.20M, with average 10-day volume coming in at 5.43 million.
Using a Force Index Indicator is a good way to look at how strong actual buying and selling pressure is for NFLX. When we apply the Elder Force Index to Netflix Inc., we are seeing an Elder Force Indicator number of -13877606.4.
The recent performance of the stock is another area that can tell traders how to proceed. NFLX is presenting an interesting case. This can be seen in the Forward P/E ratio, which currently stands at 60.83. Moreover, the company’s enterprise value has gone from $210.20B to $174.88B quarter-over-quarter. Obviously, the company is heading in the wrong direction, but there are still opportunities for growth in the sector.
In the last quarter, NFLX made a profit of 2.5 billion. Netflix Inc. also saw quarter revenue growth year over year of 27.62%. In addition, the company has operating cash flow of -$662.78 million.
Looking at popular technical indicators, the company’s 5-day moving average is 518.25 compared to the 50-day moving average of 502.28. So, we are clearly seeing an upward trajectory here.
The Relative Strength Index or RSI is an indicator ranging between 0 and 100 that traders use to determine if a stock is “overbought” or “oversold.” A strong uptrend tending to reach into the “overbought” status is above 70, while a downward trend will stay around the 30 mark. NFLX currently holds a 9-day RSI of 59.36%, while 100-day RSI stands at 54.56%.
Another indicator we believe is worth keeping tabs on is the Moving Average Convergence Divergence or MACD. Similar to the concept of the Force Index — on the basis of price momentum — the MACD gives traders a tool to measure the turning point of a stock even during rapid fluctuations in price. Buy and sell signals are determined by a stock’s relation to the zero line, so if a stock is above a zero line for many weeks it might be a “buy.” On the other hand, if a stock is below the zero line consistently, it might be one to stay away from. Also, if the MACD line reaches a peak and dips, its momentum may be waning. NFLX’s 9-day MACD is 11.08 and the company’s 100-day MACD stands at 41.90.
Another area that is important to analyze is insider moves and majority shareholders. While this is not always an error-free way to tell what the future holds for a stock, you can maybe gather important information from reading the tea leaves about who is buying and selling.
The major holders for this stock are 1.62% by insiders and 83.49% by institutions. Regarding institutional holdings, Capital Research Global Investors owns 7.73%, while the second top holder, Vanguard Group, Inc. (The), currently owns 7.71%.
Over the last six months, insiders have sold 34,853 with the most recent transaction from HASTINGS REED, Co-CEO, with a sell at price 476.68 per share.
Overall, the recommended rating for NFLX is Moderate Buy. Currently, the company has 38 analysts watching the stock, and the average quarterly earnings estimate is 2.12. Quarterly revenue estimates are averaging 6.37B with the high estimate reaching 6.49B and the low at 6.27B.
To review, the current 1-year target estimate is sitting at 520.17, while the current price 526.26. Based on this, we expect some pullback on the stock over time given our above analysis.