Netflix (NFLX) Q1 Earnings Preview: All You Need to Know
Netflix (NFLX) Q1 Earnings Preview: All You Need to Know
The streaming service’s stock surged to all-time highs this year but pulled back
- Netflix is scheduled to report Q1 earnings on after the market close on Thursday.
- The stock has held up better than its mega-cap peers during the market sell-off over the past month.
- This will mark the first quarter that Netflix does not report subscriber growth and is instead relying on other metrics.
Netflix (NFLX) is scheduled to report first quarter earnings on Thursday after the market close. It will be one of the first major technology companies to report for this earnings season.
The pioneer streaming service saw its stock price surge to all-time highs earlier this year, hitting 1,064.50 in February. Prices have pulled back since then, down about 13% to trade around the 930 handle today.
The affect of tariffs on the global economy and the resulting market sell-off over the past month has dragged the technology stock lower, but it’s managed to hold up better than its peers.
The Roundhill Magnificent Seven ETF (MAGS), which includes Microsoft (MSFT), Tesla (TSLA) and other mega-cap technology stocks, dropped over 20% since January. In comparison, Netflix is down only about 7% over the same period.
What do investors expect?
Netflix is coming off a strong year in 2024 after it added over 40 million subscribers to boost its total subscriber base to over 300 million users.
The streaming service has managed to add subscribers despite price hikes, which have supported margins. Its standard plan with ads is $7.99 per month, up from $6.99, and its premium plan is at $24.99, up from $22.99.
According to TradingView, analysts expect Netflix to report earnings per share (EPS) of $5.69 on $10.5 billion in revenue. That would be up from an EPS of $5.28 on $9.4 billion in revenue a year ago. Last quarter, Netflix reported EPS of $4.27 on $10.25 billion in revenue.
Netflix has a solid track record of beating EPS and revenue estimates, with four of the last five reporting periods exceeding EPS estimates and only missing revenue expectations once over the same period.
One notable thing about this earnings announcement is that it will be the first report not to release subscriber numbers, a change that was announced last year. The company will focus on other metrics, such as hours of viewing, retention rates and other financial information .
Trading Netflix earnings
Netflix traded with an implied volatility rank (IVR) of 66.1 today, meaning volatility is elevated compared to the past 12 months of trading. For traders who prefer an options selling strategy, the increased volatility offers more premium to play with. The directional move remains the wild card, as always. The options market expects a move of +/- 7% following earnings. The 1,000 level will be a key technical barrier to break if bulls manage to take control following the report.
Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. #@fxwestwater
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