Earnings season has quickly taken the stage, propelled by the financial results of major banks that set the tone for what is to come. The technology sector, renowned for its resilience and innovation, is once again anticipated to deliver robust performance.
This week’s spotlight shines on Netflix (NFLX), the darling of many investors, set to unveil its quarterly report on Thursday post-market closure. Anticipation is high, with the results possibly offering a sneak peek into the upcoming quarterly performance of Roku (ROKU), scheduled for July 25th.
Let’s delve deeper into the expectations surrounding these pivotal releases.
Netflix’s Steady Climb Towards All-Time Highs
Though a recent earnings announcement caused a temporary dip in Netflix’s share price, the subsequent recovery has been remarkable. Currently trading near all-time highs, the company exhibits remarkable momentum. In its latest report, NFLX exceeded expectations with an 83% surge in earnings and a 14% increase in revenue.
Subscriber metrics continue to hold significant weight, even as the company plans to discontinue quarterly membership numbers reporting from 2025 Q1 onwards. The most recent data revealed a 16% year-over-year rise in total subscribers, with Netflix surpassing expectations for the fourth consecutive quarter.
Projections for earnings and revenue remain stable, indicating an expected 43% growth in EPS and a 17% rise in sales. Improved operational efficiencies have bolstered the company’s profitability, driving margins upwards in recent periods.
It’s worth noting that the chart data is based on a trailing twelve-month period.
Image Source: Zacks Investment Research
Strong subscriber performance might propel Netflix to new heights, especially given its favorable Zacks Rank #2 (Buy). The current 1.1X PEG ratio positions the shares attractively heading into the disclosure.
Roku Continues its Positive Trajectory
Roku’s recent quarterly results showcased encouraging trends, with a 14% growth in Streaming Households and a 23% increase in Streaming Hours compared to the previous year. Notably, Roku retains its position as the top-selling TV OS in the U.S. and Mexico.
Similar to Netflix, Roku is anticipated to exhibit strong growth, with earnings and revenue predicted to climb by 40% and 10%, respectively. Analysts have adjusted their estimates positively, keeping them steady since then, evident from the 16% rise in Zacks Consensus EPS estimate since April’s end.
Image Source: Zacks Investment Research
Insightful Outlook
Fans of Netflix await its upcoming quarterly unveiling with optimism, following positive trends leading up to the event. The company maintains a favorable Zacks Rank #2 (Buy), while earnings and revenue forecasts stand firm.
The impending Netflix results may provide a glimpse into Roku’s performance, graced with favorable recent results that underscore the underlying strength in streaming services.
Zacks Names #1 Semiconductor Stock
It’s only 1/9,000th the size of NVIDIA, which surged over +800% since our recommendation. While NVIDIA remains robust, our leading chip stock holds significant growth potential.
With robust earnings growth and an expanding clientele base, it is well-positioned to fulfill the soaring demand for Artificial Intelligence, Machine Learning, and Internet of Things. Forecasts suggest a monumental rise in global semiconductor manufacturing from $452 billion in 2021 to $803 billion by 2028.