Netflix Q4 Earnings Preview - Netflix's Q4 sales are expected to increase 14% to $10.12 billion compared to $8.83 billion in the same quarter last year [2] - Q4 EPS is projected to climb 98% to $4.19 versus $2.11 per share a year ago [2] - For fiscal 2024, Netflix is expected to report a 15% increase in total sales to $38.86 billion and a 64% spike in annual earnings to $19.77 per share [2] Earnings Performance History - Netflix has exceeded sales estimates for five consecutive quarters [3] - The company has surpassed earnings expectations in three of its last four quarterly reports with an average EPS surprise of 5.73% [3] - Recent quarterly surprises include 6.09% in Q3 2024, 3.83% in Q2 2024, and 17.07% in Q1 2024 [4] Subscriber Growth - Netflix is expected to add over 7 million subscribers in Q4, reaching a total of 287.48 million subscriptions [5] - This represents a 10% increase from the 260.28 million subscribers at the end of Q3 2024 [5] Valuation Metrics - Netflix currently trades at a 35.6X forward earnings multiple, which is a premium to the S&P 500's 22.2X and Disney's 19X [6] - The stock trades well below its five-year high of 88.5X forward earnings and at a slight discount to the median of 37.4X during this period [6] Market Position - Netflix maintains its position as the streaming leader ahead of Disney [5] - The company's stock has outperformed both the broader market and Disney shares in recent years [6]

Company Overview - Trinity Asset Management was founded by Brian Gilmartin in May 1995, focusing on providing attention and service to individual investors and institutions that were underserved by larger firms [1] - Brian Gilmartin has a background as a fixed-income/credit analyst and has experience working with various firms before establishing his own [1] Professional Background - Brian Gilmartin holds a BSBA in Finance from Xavier University and an MBA in Finance from Loyola University, with the CFA designation awarded in 1994 [1] - He has contributed to financial publications such as TheStreet.com, WallStreet AllStars, and Minyanville.com, and has been quoted in major outlets like the Wall Street Journal [1]

Core Insights - Netflix Inc is set to report its fourth-quarter earnings, with Wall Street expecting an EPS of $4.19 and revenues of $10.11 billion, indicating significant market anticipation [1] - The stock has shown a remarkable increase of 79.33% over the past year and 33.04% over the last six months, reflecting strong investor interest [1] Stock Performance and Technical Analysis - NFLX stock is currently facing strong bearish momentum, trading below its five-day, 20-day, and 50-day exponential moving averages, indicating persistent selling pressure [2] - The short-term trend remains weak, with the 20-day simple moving average at $881.48 and the 50-day SMA at $875.87 suggesting a bearish outlook [2] - The Moving Average Convergence Divergence (MACD) indicator is at a negative 10.67, signaling continued weakness, while the Relative Strength Index (RSI) at 45.94 indicates potential for further declines [3] Long-term Support and Potential Trends - Despite current weakness, the eight-day SMA at $851.55 is just below the current price, and the 200-day SMA at $715.29 remains well below the share price of $861.20, indicating long-term bullish support [4] - Investors should monitor for potential stabilization around current levels or a deeper pullback, as a sustained break below key technical support levels could lead to an extended bearish trend [4] Analyst Ratings and Price Targets - The consensus analyst rating for Netflix stock is currently a Buy, with a price target of $870.13 [5] - Recent ratings from Loop Capital, Seaport Global, and Rosenblatt suggest a downside of 0.72%, with an average price target of $853.33 [5] - At the time of publication, Netflix stock was trading at $860.25 [5]

Core Insights - Netflix is expected to report its fourth-quarter results, with analysts generally optimistic about the company's performance, as indicated by a majority of "buy" ratings from brokers [1][5] - The consensus price target for Netflix shares is approximately $905, suggesting a potential upside of about 7% from the recent stock price [1] - Analysts anticipate a 15% year-over-year revenue growth for Netflix, projecting revenues of $10.13 billion and earnings of $1.84 billion, or $4.23 per share [4] Analyst Ratings - Among the 19 brokers covering Netflix, 14 have issued "buy" or equivalent ratings, while only four have "hold" ratings and one has a "sell" rating [1] - Wedbush Securities has set a target price of $950, citing Netflix's strong position in the streaming market and the success of its ad-supported subscription tier [2] - JPMorgan has adjusted its price target to $1,000, highlighting the potential for subscriber growth and high-margin revenue from the ad-supported tier and password-sharing crackdown [3] Financial Projections - The expected revenue growth of 15% year-over-year is significant, with earnings projected to rise from $937.8 million, or $2.11 per share, to $1.84 billion, or $4.23 per share [4] - The stock has shown strong performance, increasing approximately 70% over the past 12 months, closing just above $842 recently [4]

Core Viewpoint - Netflix is expected to gain a significant number of subscribers in Q4, driven by sports content, but may face challenges in retaining these subscribers post-holiday season [1][4]. Subscriber Growth - Analyst Barton Crockett predicts that Netflix's subscriber growth will exceed estimates, with viewership for top 10 titles increasing by 25% year-over-year in Q4 [4]. - The platform's expansion into sports is anticipated to contribute positively to subscriber numbers, particularly around the Christmas Day NFL games [2][3]. Financial Performance - Netflix is projected to outperform revenue estimates for Q4, with advertising revenues from two NFL games potentially exceeding $120 million [3]. - The company has successfully sold out its advertising slots for these NFL games, indicating strong demand [3]. Future Outlook - Despite positive indicators for Q4, there is caution regarding Q1 guidance, as Netflix will lose the NFL advertising boost and may see subscriber churn from those who joined for specific events [4]. - The analyst emphasizes the importance of demonstrating a return on investment for sports rights during the upcoming earnings call [5]. Stock Performance - Netflix's stock has seen a 0.4% increase, currently trading at $852.16, with a notable 77% rise over the past year [5].

Core Viewpoint - Netflix Inc. is set to announce its fourth-quarter earnings on January 21, aiming to replicate its previous post-earnings success from October [1] Group 1: Earnings Expectations - Historically, Netflix stock has shown mixed post-earnings reactions, with four out of eight sessions finishing higher in the past two years [2] - After the October earnings report, Netflix stock surged by 11.1%, and options traders are currently pricing in a 9.4% potential move for the stock, which is higher than the average 8.6% post-earnings swing over the last eight reports [2] Group 2: Stock Performance and Analyst Ratings - Shares of Netflix are currently up 1% to $856.50, boosted by an upgrade to "buy" from Seaport Research Partners, with price-target increases from BMO and Oppenheimer to $1,000 and $1,040, respectively [3] - Despite a 25% gain over the past three months and reaching an all-time high of $941.75 on December 11, Netflix stock is down 3.8% year-to-date [3] - An outstanding earnings report could influence analysts, as 17 out of 41 brokerages currently maintain a "hold" or worse rating on Netflix [4] Group 3: Options Market Sentiment - Options traders are showing a preference for puts ahead of the earnings announcement, with a 10-day put/call volume ratio of 1.02, indicating unusually high demand for puts [5] - This put/call ratio ranks in the 90th percentile of its annual range, suggesting that traders may need to adjust their positions if there is a post-earnings upward movement [5]

Core Insights - The article discusses the investment position of Parkev Tatevosian, CFA, and mentions that he has no position in any of the stocks mentioned [1] - The Motley Fool has positions in and recommends Netflix, indicating a positive outlook on the company [1] Company Analysis - Parkev Tatevosian is affiliated with The Motley Fool and may receive compensation for promoting its services, which could influence his opinions [1] - The Motley Fool's disclosure policy is highlighted, emphasizing transparency in their investment recommendations [1]

Core Viewpoint - Netflix has demonstrated significant stock performance, climbing 400% from its 2022 lows and 75% over the past year, outperforming the tech sector's 30% growth [1][12]. User Growth and Revenue - Netflix has successfully expanded its user base, adding 22.5 million paid subscribers in the first three quarters of 2024, achieving an average year-over-year growth of 16% to reach 282.72 million subscribers [4]. - The company reported that over 50% of new sign-ups are for its ad-supported plans, which have reached 70 million global users since their launch [3][4]. Financial Performance - In Q3, Netflix achieved a record-high operating margin of 30% and increased its operating profit by 52% year-over-year to $2.9 billion [9]. - The company expects its revenue to grow by 15% in 2024 and over 12% in 2025, reaching $43.71 billion, which is an increase of $10 billion compared to 2023 [9]. Competitive Positioning - Netflix's ad-supported subscription plan is priced at $6.99 per month, lower than Disney's $9.99 plan, allowing it to maintain a competitive edge [5]. - The company has expanded into live sports and reality TV, which has contributed to subscriber retention and growth [7]. Stock Performance and Valuation - Over the past decade, Netflix shares have surged 1,660%, significantly outperforming the tech sector [12]. - Currently, Netflix trades at over a 90% discount to its 10-year highs and 42% below its 10-year median forward earnings [13]. Future Outlook - Starting in Q1 2025, Netflix will cease providing subscriber numbers, focusing instead on earnings and other financial metrics [14][17]. - There is speculation about a potential stock split in the future [18].

Group 1 - Proactive provides fast, accessible, informative, and actionable business and finance news content to a global investment audience [2] - The news team covers medium and small-cap markets, as well as blue-chip companies, commodities, and broader investment stories [3] - Proactive's content includes insights across various sectors such as biotech, pharma, mining, natural resources, battery metals, oil and gas, crypto, and emerging technologies [3] Group 2 - Proactive is committed to adopting technology to enhance workflows and improve content production [4] - The company utilizes automation and software tools, including generative AI, while ensuring all content is edited and authored by humans [5]

Netflix Earnings and Market Performance - Netflix is expected to report 15% fourth-quarter revenue growth, implying revenue above $10 billion, compared to Visible Alpha's mean estimate of $10.1 billion [2] - The company anticipates sequential growth in paid net subscriber additions for Q4 [2] - Netflix shares are up approximately 70% over the past 12 months, despite being in the red year-to-date [2] Analyst Price Target and Rating - Oppenheimer analysts, led by Jason Helfstein, slightly reduced their Netflix price target from $1,065 to $1,040 while maintaining an "outperform" rating [3][4] - The new price target is about 25% above Tuesday's closing price and 15% higher than the Visible Alpha mean estimate of $905 [3] - Oppenheimer's caution is primarily due to the outlook for 2025 revenue, influenced by a strong US dollar [2][4] Market Reaction and Investor Sentiment - Netflix shares climbed more than 2% to around $848 as broader markets rose [4][5] - Investors are likely anticipating the company's upcoming quarterly financial results, which are expected to be a key moment in the tech-industry earnings season [5]