Netflix, the reigning monarch of video-streaming services, is preparing to unveil its second-quarter 2024 financial report post-market on Jul 18. A behemoth in the industry, the streaming giant has garnered investor interest as it continues to push the envelope in terms of subscriber growth and market performance.

Over the past quarter, Netflix’s stock has flourished, outstripping its industry peers by a marginal 0.7%. As anticipation brews for the forthcoming earnings release, there’s a sense of bullish optimism that prevails among investors, hinting at a potential continuation of this upward trajectory should Netflix deliver stellar results.

Set against the backdrop of an ever-evolving digital entertainment landscape, ETFs tethered to Netflix like MicroSectors FANG+ ETN FNGS, Invesco Next Gen Media and Gaming ETF GGME, First Trust Dow Jones Internet Index Fund FDN, Pacer BioThreat Strategy ETF VIRS, and First Trust S-Network Streaming & Gaming ETF BNGE are in the thick of the action.

Unveiling Earnings Whispers

Netflix is at a curious crossroads with an Earnings ESP of 0.00% and a Zacks Rank #2 (Buy). According to the Zacks methodology, a positive Earnings ESP coupled with a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) augments the odds of an earnings beat. Plunging into the nuances, analysts have remained mum on altering their earnings estimates for Netflix in the imminent quarter.

Market forecasts paint a rosy picture, envisioning a 42.9% surge in earnings and a 16.4% revenue upswing for Netflix in the impending financial report. Boasting a history of exceeding expectations, Netflix has averaged an impressive 9.26% earnings surprise over the preceding four quarters despite being part of a Zacks industry nestled in the lower echelons.

Delving into Netflix’s Market Standing

Netflix shines under the scrutiny of analysts, boasting an average brokerage recommendation (ABR) of 1.91 on the 1 to 5 scale – portraying a consensus tilted towards bullish sentiments. Among the 39 brokerage firms contributing to this number, 53.85% advocate for a Strong Buy, underlining the widespread optimism regarding Netflix’s future prospects.

With 34 analysts putting forth short-term price targets, the consensus for Netflix points to $655.24, capturing a broad spectrum that ranges from a modest $450.00 to an ambitious $800.00.

What Lies Ahead for Netflix?

Netflix has been on a charm offensive, garnering favor among analysts in the run-up to its Q2 earnings. Heavyweights like JPMorgan, KeyBanc, and TD Cowen have all raised their price targets on Netflix, citing sustained momentum in subscriber growth. The streaming giant flaunts an exquisite lineup for the latter half of 2024, showcasing tentpoles like NFL, Squid Game, Night Agent, and Cobra Kai.

Expanding its horizons beyond traditional realms, Netflix has ventured into live sports programming, diversifying its offerings. Recent strategic moves encompassing lucrative deals to accentuate its sports catalog, including NFL games on Christmas Day and WWE events. On this trajectory, Netflix is expected to further bolster its sports content library, aiming to bolster subscriber numbers and ad revenues.

Looking ahead, Netflix projects a 16% surge in revenues year over year, amounting to $9.49 billion, alongside an anticipated earnings per share of $4.68 for the second quarter.

Unlocking the Potential of ETFs Aligned with Netflix

MicroSectors FANG+ ETN (FNGS)

MicroSectors FANG+ ETN mirrors the performance of the NYSE FANG+ Index, spotlighting an equally-weighted selection of high-growth stocks from the tech and tech-enabled sectors. With Netflix grabbing a 10% stake in this illustrious basket, the ETF has amassed $383.6 million in assets, maintaining an affordable fee structure of 58 bps annually.

Invesco Next Gen Media and Gaming ETF (GGME)

Invesco Next Gen Media and Gaming ETF accentuates companies poised to harness the future of media through cutting-edge technologies. Netflix holds a significant 7.7% share in this eclectic mix, maturing into a $39.3 million asset base with an expense ratio of 60 bps.

First Trust Dow Jones Internet Index Fund (FDN)

First Trust Dow Jones Internet Index Fund offers a broad canvas, mirroring the Dow Jones Internet Composite Index and presenting exposure to the vast internet industry. With Netflix securing the third slot at 6.3%, the FDN unfurls as a popular ETF boasting an AUM of $6 billion, coupled with a Zacks ETF Rank #1 and a risk outlook veering towards the high end.

Pacer BioThreat Strategy ETF (VIRS)

Pacer BioThreat Strategy ETF seeks exposure to U.S. entities engaged in addressing diverse biothreats. Nestled within the asset mix are 56 stocks, with Netflix seizing an 8th place sanctity, commanding 4.7% of VIRS assets. This ETF holds modest assets worth $3.7 million and levies an annual expenditure of 70 bps.

And so, the curtain is raised on a dynamic period for Netflix, where ETFs tethered to this entertainment juggernaut stand poised for future conquests, mirroring Netflix’s unfolding narrative in the realm of digital content supremacy.

The Market Landscape

The S-Network Streaming & Gaming Index boasts a collection of 45 stocks within its basket. Notably, Netflix secures the eighth position, making up 4.4% of the total assets.

Sector Breakdown

Upon closer inspection, the entertainment sector dominates with a sizeable 42.5% share. Following closely behind are hotels, restaurants & leisure, semiconductors & semiconductor equipment, and interactive media & services, each with substantial double-digit exposure.

Financial Statistics

First Trust S-Network Streaming & Gaming ETF has amassed a solid asset base of $5.3 million. Despite its small size, the fund experiences an average daily volume of under 1,000 shares. Investors are subject to an annual fee of 70 bps.