Netflix is gearing up to announce its Q1 2024 financial results on April 18, with estimated revenue of $9.3 billion, slightly surpassing both consensus estimates and the company's guidance. This projection indicates a 14% year-over-year growth. Earnings are expected to reach $4.50 per share, aligning closely with market expectations.
The streaming giant has experienced positive momentum in subscriber growth and revenue, attributed to initiatives such as cracking down on password sharing and expanding its ad-supported streaming service. In Q4 2023, Netflix added 13 million new subscribers, surpassing analyst forecasts and reaching a total of 260.8 million paid subscribers.
Introducing a paid sharing option in the U.S. has allowed users to share accounts outside their households for an additional fee, contributing to increased revenue. Moreover, the ad-supported tier has gained traction, attracting price-sensitive customers with a value proposition priced at $7 per month.
Despite a 15% rise in Netflix's stock value since early 2021, the company has faced fluctuations in returns over the past few years. While the stock underperformed the S&P 500 in 2021 and 2022, it saw a 65% increase in 2023. Concerns about the macroeconomic environment and potential subscriber growth stabilization may impact Netflix's future performance.
Although a positive earnings report could lead to a slight stock price increase, some analysts believe Netflix is currently overvalued, trading at approximately 36x forward earnings. With a price estimate of $502, 20% below the current market price, analysts caution about the stock's valuation.
As Netflix prepares to unveil its Q1 results, investors are keen to see how the company's subscriber base and revenue trends will influence its performance in the coming quarters.
