Netflix is showing resilience in the face of economic turmoil as shown by the streaming video leader's strong first-quarter report. Netflix stock jumped on the news late Thursday.
The internet television network hasn't seen any noticeable impact from the economic disruption spurred by tariffs and trade disputes, Co-Chief Executive Greg Peters said on a webcast with analysts. The company hasn't noted any substantial changes in subscriber churn or trade down in service plans, he said.
"We're paying close attention clearly to the consumer sentiment and where the broader economy is moving," Peters said. "But based on what we are seeing by actually operating the business right now, there's nothing really significant to note."
Netflix's low-cost advertising-supported service plan should give it more resilience should the macroeconomic climate worsen, he said.
In the first quarter, Netflix earned $6.61 a share, up 25% year over year, on sales of $10.54 billion, up 12.5%. Both metrics topped consensus estimates.
For the current quarter, Netflix forecast earnings of $7.03 a share, up 44%, on revenue of $11.04 billion, up 15%. Its guidance also was ahead of views.
Netflix stock has formed a double-bottom base with a buy point of 998.70, according to IBD MarketSurge charts. It is poised for a breakout on Monday if after-hours trading gains Thursday carry over to the regular session. Markets are closed Friday for Good Friday.
Netflix stock ended the extended trading session Thursday up 3.5% to 1,006.79.
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Netflix Stock Scores Price-Target Hikes
At least seven Wall Street firms raised their price targets on Netflix stock after the company's earnings report.
Netflix continues to post superior financial results "while its streaming peers generate substantial losses (and) are resorting to aggressive price hikes amidst generally mediocre subscriber results," Pivotal Research Group analyst Jeffrey Wlodarczak said in a client note.
Wlodarczak reiterated his buy rating on Netflix stock and upped his price target to 1,350 from 1,250.
BMO Capital Markets analyst Brian Pitz kept his outperform rating on Netflix stock and increased his price target to 1,200 from 1,175.
Pitz is optimistic that Netflix's nascent advertising business will become a major revenue and earnings driver.
Netflix launched its ad technology suite on April 1 in the U.S. and Canada. It plans to roll it out in 10 remaining international markets in the second quarter. The suite offers new capabilities that ad buyers are looking for, Peters said. That includes better targeting of audiences and more accurate measuring.
Big Long-Term Aspirations
On the analyst call, Netflix executives discussed a recent Wall Street Journal article that revealed that the company has a goal to double its revenue by 2030.
Co-CEO Ted Sarandos expressed disappointment that the company's confidential stretch goals leaked to the press.
"We often have internal meetings and we talk about long-term aspirations, but it's important to note that this is not the same as forecast," he said. "We don't have a five-year forecast or five-year guidance. But you can assume that we are long-range thinking and that we're working hard every day to build the most loved and valued entertainment company for all of our stakeholders."
Netflix stock is on three IBD stock lists: Big Cap 20, IBD 50 and Stock Spotlight. It's also on the IBD Leaderboard watchlist for potential inclusion.
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Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
