Los Gatos, California-based Netflix, Inc. (NFLX) provides entertainment services. It offers TV series, documentaries, feature films, and games across various genres and languages. With a market cap of $339.8 billion, Netflix's operations span over 190 countries worldwide.
The entertainment giant has significantly outperformed the broader market over the past year. NFLX stock prices have surged 63.3% on a YTD basis and 82.1% over the past 52-week period, outpacing the S&P 500 Index’s ($SPX) 25.7% gains on a YTD basis and 36.8% returns over the past year.
Zooming in further, NFLX has also outperformed the Invesco Next Gen Media and Gaming ETF's (GGME) 31.8% return on a YTD basis and 45% gain over the past year.
Netflix stock prices surged 11.1% following its impressive Q3 earnings release on Oct. 17. The streaming giant reported a robust 15% year-over-year growth in total revenues, reaching $9.8 billion, driven by substantial growth in paid subscribers across various regions. The Asia-Pacific region led with an 18.9% rise in streaming revenue, reaching $1.1 billion, supported by 24% growth in paid memberships to 52.6 million. The U.S. & Canada and EMEA regions also showed solid revenue growth of 15.7% and 16.3%, respectively, while Latin America lagged slightly, with an 8.6% increase to $1.2 billion, impacted by a decrease of 68,000 paid memberships during the quarter.
In addition to the robust revenue growth, Netflix also reported a significant growth in profitability. Its net income soared by 40.9% year-over-year to $2.4 billion, and its EPS of $5.40 surpassed analysts' consensus estimates by 6.1%, bolstering investor confidence.
For the current fiscal year, ending in December, analysts expect NFLX to report a 64.4% year-over-year growth in EPS to $19.78. Netflix’s earnings surprise history is mixed. It has surpassed analysts’ bottom-line estimates in three of the past four quarters while missing on another occasion.
NFLX stock has a consensus “Moderate Buy” rating overall. Out of the 41 analysts covering the stock, 23 recommend “Strong Buy,” two advise “Moderate Buy,” 14 suggest “Hold,” and two advocate a “Strong Sell” rating.
On Oct. 29, Guggenheim analyst Michael Morris maintained a “Buy” rating on NFLX while raising the price target to $825.
As of writing, NFLX is trading above its mean price target of $774.58. The Street-high target of $925 suggests a potential upside of 16.3% from current price levels.
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.
