The 2024 Q2 earnings season is in full swing, with today’s results from the big banks kicking the period into a higher gear. Another period of positivity is expected, with the S&P 500 anticipated to post positive earnings growth once more.
Earnings from Streaming Powerhouse – Netflix
When it comes to the entertainment realm, all eyes are on the streaming giant Netflix, set to unveil its quarterly results on Thursday, July 18, after the market’s close. Although recent dips led to panic among investors, shares have bounce back, soaring towards all-time peaks.
Subscriber metrics are poised to steal the limelight in the upcoming release; however, it’s crucial to note that the quarterly membership figures will no longer be disclosed from 2025 Q1 onwards.
As of the latest report, Netflix boasted 269.6 million total subscribers, marking a 16% year-over-year surge. The company’s ability to attract new subscribers has consistently surpassed expectations, registering four consecutive wins.
Despite the rollercoaster ride for shares, earnings and revenue forecasts remain stable, with current estimates indicating a 43% growth in earnings per share and a 17% jump in sales. Operational efficiencies have propelled the company towards enhanced profitability, as evidenced by the escalating margins in recent periods.
Of note, the subsequent chart illustrates data on a trailing twelve-month basis:
Insights into Taiwan Semiconductor
Taiwan Semiconductor’s stocks have flourished amid the semiconductor boom in 2024, amassing an impressive 80% surge and vastly outshining its peers. The artificial intelligence (AI) craze has been the linchpin of the semiconductor uptrend, with firms racing to harness the potential of AI chips.
Earnings predictions remained steady for a considerable duration before experiencing an uptick lately, with the $1.37 per share estimate hinting at a 20% leap from the same period last year. Similarly, sales expectations have been optimistic, with the projected $20.2 billion underscoring a 5% increase and representing a substantial 29% year-over-year advance.
The ballooning valuation multiples, driven by high-growth anticipation, currently stand at 26.5X forward 12-month earnings, surpassing the 19.8X five-year median. However, the current PEG ratio of 1.1X indicates that investors aren’t overpaying for accelerated growth.
It’s worth mentioning that following the latest results, TSM announced a 10% bump in its payout, elevating the quarterly total to $0.45/share. TSM’s unwavering commitment to enhancing shareholder value has cemented its status as a top pick among income-oriented investors seeking exposure to the tech and semiconductor sectors.
A Glimpse at Johnson & Johnson’s Prospects
Consumer goods stalwart Johnson & Johnson has witnessed stagnant stock movements over the past three years, largely trading sideways and showing a slight 4% dip overall. Nevertheless, the company has consistently outperformed in earnings, surpassing our estimated EPS in the last ten quarters.
For the upcoming release, the trend in earnings estimates has veered slightly bearish, with the Zacks Consensus EPS estimate of $2.71 down by 1% since mid-April. Revenue expectations, however, have remained constant over the same period, with the anticipated $22.4 billion signaling a 12% decline year-over-year.
The subsequent illustration showcases data on estimates and revisions:
Wrapping Up Thoughts
As the 2024 Q2 earnings season picks up steam next week, investors are advised to keep a keen eye on several key reports, notably those from Netflix, Taiwan Semiconductor, and Johnson & Johnson.