Los Gatos, California-based Netflix, Inc. (NFLX) is a provider of entertainment services. It offers TV series, documentaries, feature films, and games across various genres and languages. With a market cap of $273.2 billion, Netflix's operations span over 190 countries worldwide.
The entertainment giant has significantly outperformed the broader market over the past year. Over the past 52 weeks, NFLX surged 47.8%, outpacing the S&P 500 Index’s ($SPX) 19.6% gains. In 2024, NFLX is up 30.2% compared to SPX’s 12% returns on a YTD basis.
Zooming in further, NFLX has also outperformed the Invesco Next Gen Media And Gaming ETF’s (GGME) 28.7% returns over the past 52 weeks and 15% gains in 2024.
Despite exceeding Wall Street’s expectations for EPS and revenue, Netflix stock dipped 1.5% in the trading session following its Q2 earnings release on Jul. 18. The streaming giant reported a robust 16.8% quarterly growth in revenue and an impressive 44.4% surge in net income compared to the year-ago quarter. Additionally, it added over 8 million new subscribers during the quarter, a significant jump from the 5.9 million new subscribers added in the year-ago quarter.
However, the company’s Q3 revenue guidance of $9.7 billion fell short of the consensus estimate, making investors jittery. Despite this, the stock rebounded by 2.2% in the subsequent trading session.
For the current year, ending in December, analysts expect Netflix’s EPS to grow by a massive 58.6% year over year to $19.08. The company’s earnings surprise history is mixed. It exceeded the consensus estimate in three of the past four quarters while missing the forecasts on another occasion. Its EPS for the last reported quarter surpassed the consensus estimates by 3.8%.
Among the 39 analysts covering the NFLX stock, the consensus rating is a “Moderate Buy.” That’s based on 21 “Strong Buy” ratings, two “Moderate Buys,” 15 “Holds,” and one “Strong Sell.”
This configuration has been consistent over the past months.
On Jul. 19, Oppenheimer analyst Jason Helfstein maintained a “Buy” rating with a price target of $725, highlighting Netflix’s consistent subscriber growth and its ability to maintain a premium PE ratio as key factors for this recommendation.
NFLX’s mean price target of $694.77 represents a premium of 9.6% from current price levels. The street-high target of $800 indicates a potential upside of 26.2%.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
