The platform’s ability to take advantage of its pioneering advantage in streaming, and thus create the “Netflix effect”, continues to be one of the main differentials that the company has over Disney+ (DIS), Hulu or Warner Bros. Discovery’s Max ( WBD), among others.
Netflix: expectations grow on Wall Street due to the presentation of its balance sheet, what is the market expecting?
Since the beginning of the year, Netflix shares (NFLX) have been one of the most prominent in the large-cap technology fieldup 30% year to date and outperforming the 9% gain in the S&P 500. Extending that horizon six months, shares are up about 72%compared to the increase in 18% in the S&P 500 index.
Before the closing bell in New York City, the shares of the streaming platform rose 0.2%.
Ahead of the company’s fiscal first quarter 2024 earnings results, What to expect after the market closes on Thursday, investors have much more reason to be excited about the streaming giant’s prospects. Specifically, there is more upside potential in the stock, according to financial guru Jeffrey Wlodarczak of Pivotal Research, who, citing “continued strong momentum in core business“, raised his price target to a new Wall Street high.
“We expect another strong first quarter result as Netflix highlights its ability to grow even as it implements significant price increases“Wlodarczak wrote in a note to investors, while reiterating his Buy rating and increasing his price target to $765 from $700.
From current levels of $628, this target represents additional gains of almost 22%. The company’s growth initiatives have begun to bear fruit. Not only is the company’s effort to grow its ad-supported tier working, management has also implemented ways to curb password sharing..
Netflix management expressed confidence in its growth strategy, saying: “We believe we have a clear path to accelerate our revenue growth again: continuing to improve all aspects of Netflix, launching paid sharing and developing our advertising offering.” . Coupled with the company’s upcoming content releases, there is a compelling case to continue investing in the stock. These assumptions will be answered when Netflix issues its guidance forecast for the next quarter and full year.
Netflix: what Wall Street expects
For the quarter ending in March, Wall Street expects Netflix to earn $4.16 per share on revenue of $8.54 billion. This compares to the prior year quarter, when earnings were $2.88 per share on $8.16 billion in revenue. For the full year, ending in December, Netflix’s earnings are projected to rise 43% year-over-year to $17.20 per share, while full-year revenue of $38.65 billion would mark a 14.6% increase year-over-year.
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Netflix’s ability to take advantage of its first-mover advantage in streaming, and thus create the “Netflix effect”, continues to be one of the main differentials that the company has over Disney+ (DIS), Hulu or Warner Bros. Discovery’s Max ( WBD), among others.
In short, the company’s growth initiatives are paying big dividends. This makes a compelling case to continue investing in Netflix stock ahead of its quarterly results.
Source: Ambito
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