Netflix Poised for Strong Q4 Earnings Report Amidst Impressive Growth
Investors are eagerly anticipating Netflix’s (NFLX) fourth-quarter earnings announcement scheduled for January 21, following a year of remarkable growth for the streaming service.
Analysts Predict Significant Profit Increase
Netflix, based in Los Gatos, California, has rapidly positioned itself as a leader in the entertainment sector, boasting a market cap of $381 billion. Analysts forecast an adjusted profit of $4.21 per share for the upcoming earnings report, marking a stunning 99.5% increase from $2.11 per share in the same quarter last year. Historical performance shows a mixed record for earnings surprises; Netflix met or exceeded Wall Street’s expectations three times in the last four quarters while falling short once. In its most recent quarter, the company achieved an adjusted earnings per share (EPS) of $5.40, which was up 44.8% year-over-year and surpassed projections by 6.1%.
Future Earnings Expectations Look Bright
For fiscal 2024, Netflix’s adjusted EPS is expected to rise by 64.4%, going from $12.03 in fiscal 2023 to $19.78. This upward trend is expected to continue into fiscal 2025 as earnings grow an additional 19.5% year-over-year to reach $23.63 per share.
NFLX Stock Surges Beyond Market Trends
In the past year, NFLX shares have soared by 83.1%, significantly outpacing the S&P 500 Index’s rise of 23.3% and the Communication Services Select Sector SPDR ETF Fund’s increase of 33.2%.
Recent Performance Highlights Strong Subscriber Growth
Following a successful Q3 earnings report on October 17, where stock prices jumped by 11.1%, Netflix showcased a robust 15% year-over-year revenue growth, reaching $9.8 billion. The surge in revenue was largely attributed to increased paid subscriptions in various regions, with the Indo-Pacific area reporting an impressive 18.9% rise, totaling $1.1 billion, supported by a 24% year-over-year increase in paid memberships, which reached 52.6 million.
Both the U.S. & Canada and Europe, the Middle East & Africa regions also showed strong revenue increases of 15.7% and 16.3%, respectively. However, Latin America saw more modest growth, with an 8.6% increase to $1.2 billion, partially due to a drop of 68,000 paid memberships during the quarter. Nevertheless, Netflix’s net income surged by 40.9% year-over-year to $2.4 billion, which has helped boost investor confidence.
Analysts Maintain Positive Outlook
The consensus rating for NFLX stock remains moderately bullish, with an overall “Moderate Buy” rating. Among the 41 analysts who cover Netflix, 22 recommend a “Strong Buy,” two suggest a “Moderate Buy,” 15 advise to “Hold,” and two rate it a “Strong Sell.” Currently, NFLX is trading slightly above the mean price target of $852.58.
On the date of publication, Aditya Sarawgi did not hold any positions (directly or indirectly) in the securities mentioned in this article. The information provided is for informational purposes only. For more details, please refer to the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Nasdaq, Inc.
