Netflix Stock Surges 21.4% in April Amid Strong Earnings and Optimism

Shares of Netflix (NASDAQ: NFLX) climbed 21.4% in April, based on data from S&P Global Market Intelligence. While the company’s earnings report contributed to this momentum, the strong first-quarter results alone didn’t drive significant movement in the stock price. Instead, investor enthusiasm was fueled by rumors, leaks, and high expectations.

Investor Excitement Ahead of Earnings Report

As the earnings announcement approached, The Wall Street Journal obtained internal memos from Netflix revealing ambitious long-term goals. According to these documents, the company’s management plans to double annual revenue and triple operating income over the next five years.

This disclosure further inspired confidence among investors, with the stock price jumping 4.8% in one day based on these forecasts.

Following the earnings report, Netflix reported revenue of $10.5 billion, slightly exceeding both management’s guidance and analyst consensus estimates.

The earnings figure of $6.61 per diluted share significantly surpassed expectations, marking a 25% increase year-over-year. However, management maintained its full-year guidance, resulting in minimal movement in the stock’s price.

Despite this, Netflix had set a positive tone for investor sentiment. Several analysts issued optimistic reports on the company, contributing to a further 12.7% increase in its stock price just a week later, while the S&P 500 (SNPINDEX: ^GSPC) rose only 3.8% during the same period.

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Prospects for Continued Growth

Netflix is currently experiencing a resurgence, a notable contrast to the slower subscriber growth and declining stock prices in 2022. The company appears poised for a new chapter, with several potential growth drivers, including an affordable subscription plan, an array of live sports and streaming events, and a lineup of popular multi-season shows. While Netflix’s foray into video games is still developing, the overall outlook seems promising.

Is Netflix a Good Investment Opportunity?

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Anders Bylund has positions in Netflix. The Motley Fool has positions in and recommends Netflix. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.