Netflix Inc. Inc. scheduled to report earnings after Tuesday’s close. The stock hit a record high of $941.75/share in 2024 and it is currently trading near $858. The stock is prone to big moves after reporting earnings and can easily gap up if the numbers are strong. Conversely, if the numbers disappoint, the stock can easily gap down. To help you prepare, here is what the Street is expecting:
Earnings Preview
The company is expected to report a gain of $4.19/share on $10.15 billion in revenue. Meanwhile, the so-called Whisper number is a gain of $4.30/share. The Whisper number is the Street’s unofficial view on earnings.
A Closer Look At The Fundamentals
The company has managed to grow its earnings nicely over the last few years. In 2017, the company earned $1.25, and in 2023 the company earned $12.03, which is a very large increase! Additionally, the company is expected to earn $19.80 in 2024 and in 2025, earnings are expected to grow to $23.77! The company sports a price to earnings (P/E) ratio of 49 which is 2.0x the S&P 500.
A Closer Look At The Technicals
Technically, the stock is trading around 9% below its 52-week high and currently trading just below its 50 day moving average line. The stock is not that far away from its all-time high of $941.75. The bulls want to see the stock gap up and rally after reporting earnings and the bears want to see it gap down and fall.
True Market Leader = Remarkable Stock
The stock has has established itself as a true market leader, demonstrating exceptional performance and influence across the tech, entertainment, and broader market. Netflix is one of the strongest stocks in the market and has earned the right to be called a True Market Leader.
History
Netflix, Inc. is a global leader in entertainment and the pioneer of subscription-based video streaming. Founded in 1997 by Reed Hastings and Marc Randolph in Scotts Valley, California, the company initially operated as a DVD rental-by-mail service. Over the years, Netflix evolved into a digital powerhouse, transforming the way audiences consume content. Headquartered in Los Gatos, California, Netflix is now available in over 190 countries, serving more than 200 million subscribers as of the latest data. Its vast library of content, combined with its innovative technology, has made Netflix synonymous with on-demand entertainment.
Company Mission & Profile
The company’s mission is to “entertain the world” by providing high-quality, diverse, and engaging content that resonates with audiences across cultures and demographics. Netflix’s vision is to become the premier source of global entertainment, inspiring joy and connection through its offerings. These aspirations are supported by a subscription-based business model that generates the majority of its revenue. With multiple pricing tiers, Netflix caters to a broad spectrum of users, making its services both accessible and flexible.
Netflix’s content library includes thousands of movies, TV shows, documentaries, and specials, spanning genres like drama, comedy, science fiction, horror, and family-friendly programming. The company is widely recognized for its original productions, which have received critical acclaim and numerous awards. Flagship titles such as Stranger Things, The Crown, Squid Game, and The Irishman have captivated global audiences. In addition to streaming, Netflix continues to offer a DVD rental service in the United States and has recently expanded into mobile gaming, offering ad-free games to subscribers as part of its commitment to innovation.
A key driver of Netflix’s success is its investment in content creation and technology. The company spends over $17 billion annually on original programming, enabling it to produce culturally relevant and localized content for diverse markets. Advanced algorithms for personalized recommendations, adaptive streaming quality, and a user-friendly interface further enhance the viewing experience. With a workforce exceeding 12,000 employees, Netflix fosters a culture of inclusion, diversity, and innovation, aligning with its core values.
Competitive Advantages
Netflix has several competitive advantages. The three main ones are: its global reach, its award-winning content, and its cutting-edge technology. These advantages position it as a dominant force in the entertainment industry.
Pay Attention To How The Stock Reacts To The News
From where I sit, the most important trait I look for during earnings season is how the market and a specific company reacts to the news. Remember, always keep your losses small and never argue with the tape.
Disclosure: The stock has been featured on FindLeadingStocks.com