Pre-election seasonality weakness trends played out in spades for US equities in the months of September and October. The S&P 500 Index ETF (SPY), the most widely followed and heavily traded US equity ETF, gave back 1.77% in A
Netflix NFLX is expanding its presence in the gaming industry by testing its cloud gaming service in the United States, following initial trials in Canada and the U.K. This move is an expansion of NFLX’s mobile gaming efforts, whi
U.S. stocks dipped and benchmark Treasury yields surged on Tuesday as robust economic data and strong third-quarter earnings appeared to make the case for the Federal Reserve keeping restrictive policies in place for longer than expected.
Netflix NFLX is set to release third-quarter 2023 results on Oct 18 after market close. It is worth taking a look at the fundamentals of the world’s largest video-streaming company ahead of its results.Netflix shares have plunged
U.S. stocks ended sharply higher on Monday as investors awaited a deluge of corporate earnings results and shrugged off fears that escalated last week following the Israel-Hamas war. All three major indexes ended in positive terri
As earnings season ramps up, this week includes some big and important names. Two reports wroth watching are electric-car maker Tesla's (NASDAQ: TSLA) and streaming TV service company Netflix's (NASDAQ: NFLX). Both consumer-facing businesses will provide investors with key insigh
Stocks edged higher and bond prices slid on Tuesday as markets continued to retrace last week's moves to safe-haven assets, focusing on corporate earnings prospects and the resilience of the U.S. economy rather than tensions in the Middle East.
Asian stocks made some cautious gains on Tuesday, with investors choosing to focus on corporate earnings prospects and the resilience of the U.S. economy ahead of tensions in the Middle East.
Streaming and entertainment giant Netflix (
NASDAQ:NFLX
) will release its third-quarter earnings on October 18, 2023. Analysts expect Netflix’s paid subscriber base to increase due to the crackdown on password sharing. However, the ARPU (Average Revenue per User) may continue to face challenges.
In a research note dated October 6,
Alicia Reese of Wedbush wrote that she expects strong growth in NFLX’s membership base, led by the company’s efforts to curb password sharing. However, Reese believes that Netflix's ARPU will face challenges in Q3. This is attributed to an unfavorable mix of subscription tiers, the introduction of ad-supported subscription plans that have not yet started to contribute positively, the majority of subscriber growth originating from regions with lower ARPU, and tough year-over-year comparisons.
Nonetheless, the analyst is bullish about Netflix’s long-term prospects and reiterated a Buy rating on October 6.
With this backdrop, let’s look at the Street’s consensus estimates for the third quarter.
Netflix – Q3 Expectations
Wall Street expects Netflix to post revenue of $8.54 billion in Q3, which compares favorably to the
prior-year quarter’s revenue of $7.93 billion. Moreover, it is slightly higher than the company’s guidance of $8.5 billion.
On the bottom line, analysts expect NFLX to post
earnings of $3.49 per share, reflecting improvement on a year-over-year and sequential basis. The company’s profits should benefit from higher revenues. However, pressure on ARPU could restrict EPS growth.
Given the pressure on ARPU,
Monness analyst Brian White believes that price hikes are imminent. However, heightened competitive activity poses challenges. White reiterated a Hold on NFLX stock on October 11.
Website Traffic Data Indicates Solid Growth
Though the competition in the streaming business remains high, Netflix’s robust content slate enables it to consistently drive engagement, retain customers, and drive its paid membership base. As for the third quarter, TipRanks’ website traffic screener shows that traffic increased for NFLX sequentially and year-over-year.
Per the tool, the number of
visits to netflix.com was up 14.14% quarter-over-quarter in Q3. Moreover, website traffic jumped 37.95% on a year-over-year basis in Q3.
Learn how Website Traffic can help you research your favorite stocks
.
What is the Prediction for Netflix stock?
Wall Street analysts are cautiously optimistic about
NFLX stock ahead of Q3 earnings. It has received 18 Buy, 14 Hold, and one Sell recommendations for a Moderate Buy consensus rating. Meanwhile, analysts’ average price target of $459.44 implies 27.33% upside potential from current levels.
Insights from Options Trading Activity
Options traders are pricing in a +/- 8.25% move on earnings, lower than the previous quarter’s earnings-related move of -8.41%.
Bottom Line
Netflix is expected to benefit from its efforts to curb password sharing. Further, its strong content continues to support its growth. While its ARPU could remain under pressure in the short term, an increase in pricing and accretion from ad-supported tiers could significantly boost its financials and share price.
Disclosure
Asian stocks rose in cautious trade on Tuesday, with investors choosing to focus on corporate earnings prospects and the resilience of the U.S. economy ahead of tensions in the Middle East.
Major U.S. stock indexes ended sharply higher on Monday as investors were optimistic about the start of earnings season, while transportation and small-cap shares also jumped.
Below is Validea's guru fundamental report for NETFLIX INC (NFLX). Of the 22 guru strategies we follow, NFLX rates highest using our Twin Momentum Investor model based on the published strategy of Dashan Huang. This momentum model looks for a combination of fundamental momentum
The Q3 cycle has officially gotten underway, with the big banks fully kicking off the cycle last week on Friday. And this week, we’ll have a flurry of reports, with even more slated to come in the following periods.
U.S. stocks were sharply higher in Monday afternoon trading as investors were optimistic about the start of earnings season, with transportation shares advancing.
Wall Street's main indexes jumped more than 1% on Monday as megacaps rose to kick-start a week packed with corporate earnings and economic data, while investors also monitored the Israel-Hamas conflict.
Wall Street has been on edge lately. Investors aren't quite sure whether inflation is now under control, and even though the rate of price increases has slowed, the amount consumers have to pay for the things they want is still a lot higher than it was just a couple of years ago.
Earnings season is here. We've heard largely from financial services providers at this point, but a bellwether in consumer tech will step up with fresh financials this week. Netflix (NASDAQ: NFLX) will offer up its third-quarter results on Wednesday, shortly after the market clos