Netflix Gears Up for Q2 Earnings Release: ETFs in Focus

Core Viewpoint - Netflix is expected to report strong earnings growth and revenue growth in its upcoming second-quarter 2025 results, with shares having risen significantly in recent months, outperforming the broader industry [1][4]. Company Performance - Netflix shares have increased approximately 29% over the past three months, compared to the broader industry's growth of 25.1% [1]. - The company has an Earnings ESP of +1.68% and a Zacks Rank of 2 (Buy), indicating a strong likelihood of beating earnings estimates [3]. - Analysts predict a substantial earnings growth of 44.7% and revenue growth of 15.6% for the upcoming quarter [4]. Analyst Sentiment - Analysts maintain a bullish outlook on Netflix, with an average brokerage recommendation of 1.72 from 45 firms, where 60% recommend Strong Buy [5]. - The average price target for Netflix is $1,239.18, with estimates ranging from $800 to $1,600 [5]. - Several analysts have raised their price targets ahead of the earnings release, with BMO Capital increasing its target to $1,425, citing record viewership for "Squid Game 3" and favorable foreign exchange trends [6][7]. Growth Drivers - Netflix's low-cost advertising-supported subscriptions and expansion into live sports are expected to drive growth [8]. - The company anticipates revenues to grow 15% year over year to $11.04 billion, with earnings per share expected to rise 44% to $7.03 [8]. Valuation Metrics - Netflix shares currently have a P/E ratio of 49.65, significantly higher than the industry average of 15.63, but the company has a strong Growth Score of B, indicating potential for continued growth [9]. ETFs in Focus - Several ETFs with significant allocations to Netflix include First Trust Dow Jones Internet Index Fund (FDN), FT Vest Dow Jones Internet & Target Income ETF (FDND), MicroSectors FANG+ ETN (FNGS), Communication Services Select Sector SPDR Fund (XLC), and Invesco Next Gen Media and Gaming ETF (GGME) [2][10][11][12][13][14].