And investors' appreciation of this improving business trend should push the stock higher. Their bulk investment action then leads to price movement for the stock.įor Netflix, rising earnings estimates and the consequent rating upgrade fundamentally mean an improvement in the company's underlying business.

An increase or decrease in earnings estimates in their valuation models simply results in higher or lower fair value for a stock, and institutional investors typically buy or sell it. That's partly because of the influence of institutional investors that use earnings and earnings estimates for calculating the fair value of a company's shares. The change in a company's future earnings potential, as reflected in earnings estimate revisions, and the near-term price movement of its stock are proven to be strongly correlated. Most Powerful Force Impacting Stock Prices These are mostly driven by subjective factors that are hard to see and measure in real time.Īs such, the Zacks rating upgrade for Netflix is essentially a positive comment on its earnings outlook that could have a favorable impact on its stock price. The power of a changing earnings picture in determining near-term stock price movements makes the Zacks rating system highly useful for individual investors, since it can be difficult to make decisions based on rating upgrades by Wall Street analysts. The Zacks Consensus Estimate - the consensus of EPS estimates from the sell-side analysts covering the stock - for the current and following years is tracked by the system.

The sole determinant of the Zacks rating is a company's changing earnings picture. This rating change essentially reflects an upward trend in earnings estimates - one of the most powerful forces impacting stock prices. The plus sign at the end of LGBTQIA+ can include members of other communities, including allies - people who support and rally the LGBTQIA+ cause even though they don’t identify within the community itself.Netflix (NFLX) could be a solid addition to your portfolio given its recent upgrade to a Zacks Rank #2 (Buy).

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