Netflix is the IBD Stock Of The Day as shares of the streaming video leader surged into a buy zone one day after showing strength amid the broader market sell-off.
In morning trades on the stock market today, Netflix stock decisively broke out of a double-bottom base at a buy point of 998.70, according to IBD MarketSurge charts.
Keep in mind, investors need to be cautious in the current negative market climate. Breakouts during such times are more prone to fail. IBD continues to recommend 0% to 20% stock market exposure. Read IBD's Big Picture column for the current outlook.
Late Thursday, Netflix delivered a beat-and-raise first-quarter earnings report. Since the markets were closed Friday for Good Friday, Monday was the first regular trading session after the report.
On Monday, Netflix stock wavered around the buy point and ended the day up 1.5% to 987.91. Meanwhile, the major indexes, including the S&P 500 and Nasdaq, dropped.
On Tuesday, Netflix stock jumped 5.3% to close at 1,040.34.
At least 17 Wall Street firms raised their price targets on Netflix stock after the company's Q1 results.
In the first quarter, the internet television network earned $6.61 a share, up 25% year over year, on sales of $10.54 billion, up 12.5%.
For the current quarter, Netflix forecast earnings of $7.03 a share, up 44%, on revenue of $11.04 billion, up 15%.
Netflix Stock Appears On Three IBD Lists
Morgan Stanley analyst Benjamin Swinburne on Monday reiterated his overweight, or buy, rating on Netflix stock. He also raised his price target to 1,200 from 1,150.
"Netflix, as measured in quarters, is a predictable business," Swinburne said in a client note. "That predictability, combined with a business that should be relatively resilient in a tougher macro, support our overweight view."
The next potential catalyst for Netflix stock could be the company's advertising up-front presentation next month, he said.
Bernstein analyst Laurent Yoon kept his outperform rating and 1,200 price target on Netflix stock.
"Despite the macro backdrop, it's BAU (business as usual) at Netflix," Yoon said in a client note Monday. "The member base is growing, margins are expanding, and the show goes on."
Netflix stock is on three IBD lists: Big Cap 20, IBD 50 and Leaderboard. On Monday, IBD featured Netflix in its IBD 50 Growth Stocks To Watch column.
NFLX stock has a 21-day ATR of 4.72%.
The average true range is a metric available on IBD's MarketSurge charting tool. It gauges the characteristic breadth of a stock's behavior. Stocks that tend to make large jumps or dives in daily action, the kind that can trigger sell rules and shake investors out of a stock, have a high ATR. Stocks that tend to make more incremental moves have lower ATRs.
In the current, unpredictable market, IBD suggests stocks with ATRs of 3 or below.
Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
