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1 day ago
Netflix Could Monetize 40M Borrowers By End Of 2024, Analysts See Over 25% Upside
By: Benzinga | April 25, 2024
Netflix NFLX continues to showcase robust performance in its first-quarter earnings report for 2024.
The streaming company is now on track to monetize about 40 million borrowers (i.e., people who do not live in the same household but share the same account).
In order to curb sharers/borrowers of an account outside a household, Netflix has restricted access to sharers beyond a household. The company also devised ways to make it easier for borrowers to transfer Netflix profiles into their own account.
The initiative ultimately means more paying accounts for Netflix.
With revenue surging to $9.37 billion, a 14.8% year-over-year increase, and earnings per share standing at $5.28, surpassing analyst estimates, Netflix demonstrates its resilience and ability to thrive in the ever-evolving media industry.
The company’s relentless pursuit of growth is evident in its addition of 9.33 million paid subscribers during the first quarter alone, bringing its total subscriber base to a staggering 269.60 million, marking a significant 16.0% increase from the previous year. Such impressive numbers underscore Netflix’s unparalleled position as a market leader in the streaming space.
Netflix stock is up 68.72% over the past year, 14.02% YTD.
Netflix Strategy Through The Lens Of JPMorgan
Moreover, insights from JPMorgan’s Video Streaming Survey shed light on Netflix’s strategy to further capitalize on its user base.
The survey reveals 44% of Netflix borrowers in the first quarter indicated their intention to either obtain their own subscription (38%) or become an additional member (6%). This data suggests that Netflix is effectively converting borrowers into paying customers, with projections estimating the potential monetization of approximately 40 million borrowers by the end of 2024.
Netflix’s initiatives to curb password sharing and introduce an ad-tier plan are notable developments aimed at enhancing monetization opportunities.
With 65% of Netflix users now restricted from sharing their accounts outside their households, and a growing awareness of the ad-tier option among subscribers, Netflix is diversifying its revenue streams and catering to varying consumer preferences.
Analysts See Over 25% Upside For Netflix Stock
In light of these developments, analysts remain bullish on Netflix’s future prospects.
Following the release of the Q1 earnings report, Evercore ISI Group, B of A Securities, and Oppenheimer issued their latest ratings, collectively assigning an average price target of $691.67 for Netflix stock. This projection implies a substantial 26.03% upside potential, reflecting analysts’ confidence in Netflix’s ability to capitalize on its expanding subscriber base and innovative monetization strategies.
As Netflix continues to invest in original content, expand its global footprint, and innovate its platform, the company remains poised for sustained growth and profitability.
With a compelling combination of subscriber growth, revenue diversification, and analyst optimism, Netflix stands at the forefront of the digital entertainment revolution, poised to deliver significant value to both investors and consumers alike.
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6 days ago
Bullish Trendline Could Help Netflix (NFLX) Stock Recover
By: Schaeffer's Investment Research | April 24, 2024
• NFLX's 80-day moving average could push the stock back to its annual highs
• An unwinding of analysts' pessimism could also help the security bounce
The shares of Netflix Inc (NASDAQ:NFLX) are down 3.7% at $556.33 this afternoon, extending last week's post-earnings bear gap on the charts. The media streaming stock is on track for its fifth loss in six sessions, dragging it 8.3% lower this quarter. Still, NFLX boasts a 14.4% year-to-date lead and an even better 72.7% year-over-year gain, and this latest pullback has it near a historically bullish trendline that could soon catapult it higher.
More specifically, Netflix stock just came within one standard deviation of its 80-day moving average, after trading above this trendline since November. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, six similar signals occurred during the past three years. One month after 67% of said signals, NFLX enjoyed a 10.3% gain. From its current perch, a move of similar magnitude would put the stock above the $613 mark -- back above its year-to-date highs.
Netflix stock is also outperforming the broader-market SPDR S&P 500 ETF Trust (SPY) on a year-to-date basis, with the latter up just 6.2% in 2024. Some analysts are still pessimistic on the security despite this longer-term outperformance, with 17 of 40 covering brokerages rating it a "hold" or worse.
Now looks like an good time to take advantage of NFLX's next move with options. The equity's Schaeffer's Volatility Index (SVI) of 29% sits in the low 12th percentile of its annual range. This means the stock is currently sporting attractively priced premiums.
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2 weeks ago
Netflix Gets Island Reversal On Earnings
By: Carl Swenlin | April 19, 2024
Netflix (NFLX) earnings were released today, and the news was good. . . except for one little thing. They also suspiciously announced that, starting next year, they would no longer be reporting subscriber metrics. That's like General Motors saying that they will no longer report how many cars and trucks they made. I admit that some other aspect of the report could be a contributing factor for the crash, but let's look at the technicals.
After the gap up in January, price formed a three-month island that drifted higher, but all was not well technically. The falling PMO formed a negative divergence against the rising price. When the PMO falls above the zero line, it is telling us that the strength behind the up move is diminishing.
Also, the On-Balance Volume (OBV) went flat to slightly falling. OBV usually tracks price, and when it doesn't, it should attract our attention. In this case, it is suggesting that NFLX is not attracting sufficient volume to justify the rise in price.
Conclusion: Gaps don't always result in island reversals. For example, there was a gap up in October, following which a very similar island was formed. However, in January price gapped up from that island instead of reversing. In the case of the latest island, OBV sent up the warning flag.
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2 weeks ago
Netflix Stock Gaps Lower as Revenue Growth Weighs
By: Schaeffer's Investment Research | April 19, 2024
• Netflix is no longer going to report one of its most important metrics
• NFLX is heading for its worst week since September despite the first-quarter earnings beat
Netflix Inc (NASDAQ:NFLX) stock is 8.2% lower to trade at $560.74 today, following a mixed first-quarter report. While the streaming giant beat quarterly earnings and revenue expectations, it issued a weaker-than-expected full-year revenue growth forecast and will no longer report quarterly subscriber gains -- arguably investors' favorite metric to track. Instead, Netflix will focus on revenue, operating margin, and engagement to assess its quarterly performance.
Netflix stock is on track for its lowest close since Feb. 13. The shares are barreling toward their worst week since September, and have finished in the red in five of the last six sessions. Year-to-date, NFLX still sports a 17.4% year-to-date lead, and is testing its 100-day moving average today.
The brokerage bunch piled the bull notes on, despite the negative price action. Needham upgraded NFLX to "buy" from "hold," while Pivotal Research raised its price objective all the way to $800 -- a 42.7% premium to the security's current perch.
Options traders also have something to say. Already, 52,000 calls and 53,000 puts have crossed the tape, with total options volume running at 12 times the intraday average. Most popular is the April 550 put, while new positions are being bought to open, while the the 560-strike put from the same monthly series is also popular.
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2 weeks ago
NFLX Earnings; Poor Seasonality
By: Bespoke Investment Group | April 18, 2024
• Netflix (NFLX) is set to report Q1 earnings after the close today. Our Earnings Explorer lets you pull up all of NFLX's historical Q1 reports to see how the company has typically done. Below is a snapshot of these historical Q1 reports for NFLX pulled directly from the Earnings Explorer.
What do we see? Well, Q1 has not been a great quarter for NFLX in recent years. The company missed sales estimates and lowered guidance on both its Q1 2023 report and its Q1 2022 report. Additionally, NFLX shares have traded lower on the day of its last five Q1 reports going back to 2019.
Of course, we don't know what will happen to NFLX when it reports its Q1 2024 numbers after the close today, but at least we have all of the historical data to help us make more informed decisions.
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3 weeks ago
Netflix Surges as Rivals Stumble
By: 24/7 Wall St. | April 12, 2024
Over the past year, Netflix Inc. (NASDAQ: NFLX) shares have increased by 86% while rivals have lost billions of dollars. The S&P 500 is 36% higher over the same period. The game may already be over in a race that includes at least half a dozen large players.
In its most recently reported quarter, Netflix revenue rose 12% to $8.8 billion. The company forecasts that the growth will be 13% in the current quarter to $9.2 billion. While operating margins slipped to 17% last quarter, they are expected to jump to 26% in this one. Part of the reason for the growth was its ad-supported service. (Check out Netflix Stock Price Prediction in 2030: Bull, Base and Bear Forecasts.)
Netflix said it had 260 million subscribers worldwide in the most recently reported quarter, up from 233 million in the same quarter the year before and 247 million in the immediately previous quarter.
Except for Amazon Prime Video, which is often bundled with the Prime service and includes special deals and free delivery, Netflix competitors have lost billions of dollars. Disney+ has yet to make money since it was launched in 2019. Warner Bros. Discovery’s Max service lost $400 million in the most recently reported quarter.
Several other services will never catch up to Netflix in terms of total subscribers. Paramount+ has 63 million, Hulu has 49 million, Peacock has 28 million, and Apple TV+ has 25 million.
Among the most important parts of Netflix’s success is that Americans typically only subscribe to a few streaming services. Forbes puts the figure at 2.8. Rivals have to try to catch Netflix in an already overcrowded industry.
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3 months ago
Bull of the Day: Netflix (NFLX)
By: Zacks Investment Research | January 30, 2024
The headlines this year have been dominated by the “Magnificent Seven.” Seven large cap growth stocks that have been rocketing the market higher. Before the Mag 7, we had a different group of leaders pushing the market higher. It was FANG. Among those names is today’s Bull of the Day. It’s the company that appears to have won the streaming wars.
Today’s Bull of the Day is Zacks Rank #1 (Strong Buy) Netflix (NFLX). Netflix, Inc. provides entertainment services. It offers TV series, documentaries, feature films, and games across various genres and languages. The company also provides 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.
The company is coming off an impressive quarter with huge subscriber growth. The company added 13 million subscribers last quarter, far outpacing expectations. This big number has led eleven analysts to increase their earnings estimates for the current year and nine to do so for next year. The bullish move has increased our Zacks Consensus Estimate for the current year from $15.86 to $16.85 while next year’s number is up from $18.92 to $20.63.
That means that current year EPS growth is now slated to come in at 40%, with next year coming in at 22.41%. Those are some solid growth numbers considering the stock is trading at 33.85x earnings. Compare that to the broad market’s 20.71x earnings. Revenue growth is forecast to come in at 14.27% this year and 11.53% next year.
Image Source: Zacks Investment Research
The Price, Consensus and EPS Surprise Chart highlights the strong move off the early 2022 lows in earnings. Estimates turned around as the stock bottomed out. Shares had dipped down to the high $100s. Since then, it has been a steady slog higher. This latest earnings report, although technically a miss on EPS, has led to a rally which broke the stock out from $500, ticking up to $575 on January 29th.
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3 months ago
Netflix Is America's Greatest Media Company
By: 24/7 Wall St. | January 24, 2024
Mega media conglomerates, struggling with legacy properties, can take a step back. After decades of dominance, their primacy is over. Netflix Inc. (NASDAQ: NFLX) has become the premier media company in the world. Its latest earnings prove that.
Netflix added 13.1 million subscribers compared to the same quarter a year ago. This was well above expectations and the largest increase since people were shut in during the worst of the COVID-19 pandemic. This was even though Netflix killed password sharing. However, it may be that people who could not share passwords moved to paid subscriptions.
Netflix also offered that advertising running in-stream would be a growing source of revenue. Amazon, Google and Facebook dominate the digital marketing industry. However, Netflix has a large enough audience that it could be a force in the sector.
One argument insists that the streaming industry has become saturated. Netflix management says otherwise: “We believe there is plenty of room for growth ahead as streaming expands, and our north star remains the same: to thrill members with our entertainment.” With revenue of $8.8 billion in the most recent quarter, Netflix posted an improvement of 12% year over year. Per-share earnings were $2.11, compared to $0.12 a year ago. (These 25 American industries are booming.)
The Also-Rans
There are several large streaming services in an industry that may not have room for all of them. This may not be because of market saturation but because consumers may not be willing to have half a dozen or more services simultaneously. Other than Netflix, the company best positioned to succeed long-term is Amazon.com Inc. (NASDAQ: AMZN). Amazon Prime is bundled with a set of services that Amazon offers, which includes free shipping and space product sales. Prime members are several times more likely to shop at Amazon than people who are not. Prime, therefore, cannot be considered a standalone product.
Warner Bros. Discovery Inc. (NASDAQ: WBD), Paramount Global (NASDAQ: PARA), Walt Disney Co. (NYSE: DIS) and Apple Inc. (NASDAQ: AAPL) are in the tier below Netflix and Amazon. Apple does not break out results for its Apple TV+, but it is a tiny fraction of the company’s total. For the media companies, streaming is core to their growth. However, each one loses money on the business.
As a proxy of how investors view legacy media companies versus Netflix, note that Netflix has a market cap of $235 million while Warner Bros. Discovery’s is $25 billion.
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3 months ago
Netflix (NFLX) Stock Soars to 2-Year Highs After Earnings
By: Schaeffer's Investment Research | January 24, 2024
• The streaming giant is boosting the tech-heavy Nasdaq
• Analysts and options traders are blasting the equity in response
After its best-ever holiday season, Netflix Inc (NASDAQ:NFLX) stock is surging today, up 13.1% to trade at $556.49 at last glance and lifting the Nasdaq-100 Index (NDX) along the way. The streaming giant is brushing off an earnings miss, instead favoring better-than-expected fourth-quarter revenue and subscriber growth -- now boasting 260.8 million paid subscribers.
NFLX's options pits are unsurprisingly exploding with activity. So far, 142,000 calls and 100,000 puts have been exchanged, or 14 times the options volume typically seen at this point. New positions are being bought to open at all but two of the top 20 most popular contracts, with the most activity taking place at the monthly January 550 and 600 calls, respectively.
Analysts are also weighing in following Netflix's results. Macquarie raised its rating on the equity to "outperform" and hiked its price target to $595 from $410. Conversely, Deutsche Bank downgraded Netflix stock to "hold" from "buy," but raised its price target to $525 from $460. Overall, no less than 16 more brokerages have hiked their price targets.
Netflix stock is now headed for its highest close since January 2022. The equity has managed to add 35% over the last three months, with its 40-day moving average recently acting as a layer of support. Year over year, NFLX is now more nearly 53% higher.
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3 months ago
Netflix Earnings Send Nasdaq Futures Surging
By: Schaeffer's Investment Research | January 24, 2024
• Earnings season remains in full swing, sending stocks higher before the bell
• Netflix posted impressive fourth-quarter subscriber growth
Following yesterday's choppy session that saw the Dow Jones Industrial Average (DJI) snap a three-day win streak, stock futures are indicating a firmly higher move before the bell. The Nasdaq-100 Index (NDX) is enjoying a particularly healthy pre-market gain, after Netflix (NFLX) posted impressive subscriber numbers for its latest quarter. Futures on the S&P 500 Index (SPX) are modestly higher as well, as investors await to digest U.S. manufacturing data and a fresh slew of big-name earnings reports.
Continue reading for more on today's market, including:
• How the SPX typically performs after record highs, per Schaeffer's Senior Quantitative Analyst Rocky White.
• Don't bet on a bounce from Bristol-Meyers stock.
• Plus, more on NFLX; ABT cools off after earnings; and eBay trims its workforce.
5 THINGS YOU NEED TO KNOW TODAY
1. The Cboe Options Exchange (CBOE) saw more than 1.1 million call contracts and 674,398 put contracts traded on Tuesday. The single-session equity put/call ratio rose to 0.57, and the 21-day moving average remained at 0.71.
2. Streaming stock Netflix Inc (NASDAQ:NFLX) is enjoying an impressive 9.9% surge before the bell, as investors celebrate the company's fourth-quarter subscriber growth of over 13 million for the fourth quarter. NFLX is slated to open at $541.00 -- its highest mark since October 2021, adding to its already impressive 52% nine-month gain. Several analysts have already chimed in with price-target cuts in response, the highest coming from Wells Fargo to $650 from $460.
3. Abbott Laboratories (NYSE:ABT) reported an adjusted fourth-quarter earnings that were in-line with analyst estimates at $1.19. Revenue was slightly above estimates, as sales crossed the threshold of $4.4 billion. Despite this, ABT is down 2.3% in pre-market trading, set to trade at $111.40, set to make a dent in its nearly 4% 2024 gain.
4. Online e-tail stock eBay Inc (NASDAQ:EBAY) is up 3.4% at $43.04 ahead of the open, after revealing plans to join the layoff barrage with a 9% cut expected in its workforce. The CEO claimed the headcount and expenses going out do not equate to the company's income and growth. Year-over-year, eBay stock is down 13.1%.
5. Plenty of blue-chip earnings reports this week.
TECH STOCKS SEND HANG SENG HIGHER
Asian markets were led by Hong Kong’s Hang Seng’s 3.6% pop that was fueled by rallying tech stocks. China’s Shanghai Composite followed behind with a 1.8% gain, after the People’s Bank of China announced plans to cut the reserve ratio requirements for banks by 50 basis points from Feb. 5. Elsewhere, Japan’s Nikkei dropped 0.8% despite business activity that expanded at its fastest pace since and exports that experienced a 9.8% year-over-year growth in December. Rounding out the region, Sout Korea’s Kospi fell 0.4%.
European stocks are higher this afternoon, after a preliminary purchasing manager's index (PMI) reading indicated progressing activity in the euro zone in January. In addition, PMI figures in the U.K. hit a seven-month high in January, helping London’s FTSE to a 0.3% lead. Elsewhere, France’s CAC 40 is up 0.9%, while tech stocks are powering Germany’s DAX to a 1.4% gain.
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3 months ago
After-hours movers: Netflix surges, Texas Instruments falls, and more
By: Investing | January 23, 2024
Netflix (NASDAQ:NFLX) shares rose 7% after it reported fourth quarter results and issued guidance for the first quarter of 2024. Netflix missed consensus EPS estimates for the fourth quarter but revenue beat, and importantly it added more paid subscribers than expected. It also issued EPS guidance for the first quarter that topped consensus. Overall results were viewed as strong.
Texas Instruments (NASDAQ:TXN) shares slumped after it reported fourth quarter results. The quarter was mixed and guidance for the first quarter was very weak, with softness expected on the top and bottom line relative to expectations.
Dismal guidance from Texas Instruments negatively impacted NXP Semiconductors (NASDAQ:NXPI), Analog Devices (NASDAQ:ADI), onsemi (ON) and Microchip Technology (NASDAQ:MCHP).
Intuitive Surgical (NASDAQ:ISRG) shares climbed 7% after it beat consensus estimates for EPS and revenue.
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