As U.S. markets prepare to close for Martin Luther King Day on Monday, investors are eagerly looking to Tuesday, January 21, for trading insights, especially with Netflix NFLX releasing its Q4 results.
With its stock price soaring over +70% in the past year, Netflix’s upcoming earnings report could be pivotal in determining if now is the right time to buy.
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What to Expect from Netflix’s Q4 Earnings
Netflix is projected to report a 14% increase in Q4 sales, reaching $10.12 billion, up from $8.83 billion a year prior. Additionally, analysts foresee a remarkable 98% jump in earnings per share (EPS), estimating it to hit $4.19, compared to $2.11 last year.
For the full fiscal year 2024, Netflix could see a total sales increase of 15%, resulting in $38.86 billion. Its annual earnings estimate is set at $19.77 per share, up 64% from $12.03 in 2023.
Remarkably, Netflix has beaten sales estimates in five straight quarters and has exceeded earnings expectations in three of the last four quarters, with an average EPS surprise of 5.73%.
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Subscriber Growth Outlook
As the leader in streaming content, Netflix is anticipated to add over 7 million subscribers in Q4, bringing its total to about 287.48 million. This represents a 10% growth from 260.28 million subscribers at the end of Q3 2024.
Considering Netflix’s Valuation
Currently trading around $860 a share, NFLX has a forward earnings multiple of 35.6X, which is higher than the S&P 500’s 22.2X and Disney’s 19X.
Despite the stock’s impressive performance over recent years, it currently trades below its five-year high of 88.5X forward earnings, and shows a slight discount compared to the median of 37.4X during that period.
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Final Thoughts
As it approaches its Q4 earnings announcement, Netflix holds a Zacks Rank #3 (Hold). Historically, NFLX tends to rise after reporting favorable quarterly performance, so it will be crucial for this report to confirm its ongoing growth trend following an extensive rally over the last year.
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The views and opinions expressed herein are solely those of the author and do not necessarily reflect those of Nasdaq, Inc.
