A Streaming Giant on Top
As the anticipation for Netflix’s financial results builds with the approach of the Q1 earnings report, investors find themselves at a crossroads. With over 260 million subscribers by the end of 2023, Netflix has firmly planted its flag at the summit of the streaming services landscape. The stock has outperformed Disney and left competitors like Paramount Global and Warner Bros. Discovery in its dust, soaring +26% year-to-date.
Q1 Expectations
The upcoming Q1 report is projected to show a 13% increase in sales to $9.26 billion, with earnings per share expected to rise by a whopping 56% to $4.51 compared to the previous year. The Zacks Expected Surprise Prediction hints at Netflix potentially exceeding these figures, with the Most Accurate Estimate pegging Q1 EPS at $4.53.
Strong Subscriber Growth
Netflix’s subscriber growth has been nothing short of impressive, with estimates suggesting the addition of 5.73 million global paid memberships in Q1. This remarkable surge represents a remarkable 227% increase from the previous quarter and signals the company’s ability to stay ahead of the competition.
Valuation and Future Projections
Although Netflix shares currently trade at 36.2X forward earnings, a significant drop from its five-year high, the company’s future earnings trajectory looks promising. Projected annual earnings for fiscal 2024 are set to increase by 42% to $17.05 per share, with a further 23% climb expected in FY25.
Final Thoughts
With Netflix stock hitting dizzying new heights above $600 per share and holding a Zacks Rank #3 (Hold), the company faces a critical juncture ahead of the Q1 earnings release. A strong performance could underscore Netflix’s growth potential and solidify its position in the streaming market.