Netflix Inc (NFLX)

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Earnings Preview: Netflix Inc. (NASDAQ: NFLX)
By: 24/7 Wall St. | April 17, 2023

• Here is a look at three companies set to report first-quarter results after markets close on Tuesday.

Netflix

When Netflix Inc. (NASDAQ: NFLX) reported first-quarter earnings one year ago, sales came in less than 1% below the consensus estimate and profits jumped 21%. The stock price instantly fell by 35%.

Since then, shares have added nearly 50% after the company reported that its new ad-supported subscription plan gained some traction in the December quarter and Netflix’s announcement (finally) of a crackdown on password sharing. What the company has to say about subscription growth, particularly on the ad-supported plan and how it plans to boot freeloaders without making everyone mad, will count for more than the actual numbers, provided the numbers are not too weak.

Of 42 analysts covering the stock, 21 have a Buy or Strong Buy rating, while another 18 rate the stock at Hold. At a recent price of around $338.60 a share, the upside potential based on a median price target of $375.00 is 10.8%. At the high price target of $440.00, the upside potential is about 29.9%.

First-quarter revenue is forecast at $8.18 billion, which would be up 4.15% sequentially and by 3.9% year over year. Adjusted EPS are forecast at $2.86, up from $0.12 in the prior quarter but down 19% year over year. For the full 2023 fiscal year, analysts expect to see EPS of $111.42, up 14.8%, on sales of $34.37 billion, up 8.7%.

Netflix shares trade at 29.7 times expected 2023 EPS, 23.5 times estimated 2024 earnings of $14.40 and 18.9 times estimated 2025 earnings of $17.90 per share. The stock’s 52-week trading range is $162.71 to $379.43. Netflix does not pay a dividend. Total shareholder return for the past 12 months was negative 0.73%.

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