Netflix Inc.’s Stock on the Rise
Netflix Inc.’s stock has seen significant growth, surging nearly 40% over the past six months. And it appears that this upward trend will continue, as the recent actors’ and writers’ strikes in Hollywood have brought content production to a halt. This potential boost in the second half of the year aligns perfectly with the video-streaming giant’s impressive performance.
Strong Reaction to Ad-Supported Service
Positive Predictions for Netflix’s Future
According to Cowen analyst John Blackledge, Netflix’s paid sharing combined with the ad tier rollout will drive long-term revenue upside. The launch of paid sharing in the second quarter of 2023, along with the eventual ramping up of the ad tier, is expected to drive membership and revenue growth in the latter part of 2023. Blackledge maintains an outperform rating on Netflix’s stock, with a $500 price target.
Netflix’s Second-Quarter Earnings
Earnings: According to analysts surveyed by FactSet, Netflix is expected to report second-quarter earnings of $2.85 per share, slightly lower than $3.20 per share from the previous year. Initial predictions for the second quarter were even higher, at $3.05 per share.
Estimize Contributors Predict Netflix to Report $2.85 Earnings per Share
Revenue Expectations
Analysts and contributors on Estimize are projecting Netflix to report second-quarter revenue of $8.28 billion, a increase from $7.97 billion a year ago.
Stock Movement
Netflix’s stock has seen a significant 53% increase this year, outperforming the S&P 500’s 18% rise in 2023.
Analyst Insights
Mahaney’s Takeaways from Meeting with Netflix Management
Furthermore, Mahaney is confident that Netflix will not be significantly impacted by the ongoing writers’ and actors’ strikes in Hollywood. He notes that Netflix executives are optimistic about their current content pipeline, expecting it to sustain the company’s growth until at least early 2024.
Netflix’s Competitive Position in the Streaming Wars
Loop Capital analyst Alan Gould suggests that Netflix is winning the streaming wars against traditional studios. While traditional studios have struggled to reach profitability, Netflix has consistently been profitable and has positive free cash flow. Gould also highlights that the ongoing U.S. writers’ and actors’ strike may further enhance Netflix’s competitive advantage. This is due to the company’s extensive unreleased content and global production capabilities.
Gould indirectly references streaming rivals such as Walt Disney Co., Warner Bros. Discovery Inc., and Comcast Corp., implying that Netflix’s competitive position is stronger than theirs.
In conclusion, Estimize contributors and analysts project a positive outlook for Netflix, anticipating strong earnings and revenue growth for the upcoming quarter.
