Netflix (NFLX Quick QuoteNFLX - Free Report) is set to release third-quarter 2021 results on Oct 19 after market close. Being the world's largest video streaming company, it is worth taking a look at its fundamentals ahead of the results.

The stock has outperformed the broad industry, having gained 18% over the past three months compared to the industry’s average of 1.7%. The solid trend might continue if Netflix comes up with an earnings beat.

Image Source: Zacks Investment Research

Earnings Whispers

Netflix has a Zacks Rank #3 (Hold) and an Earnings ESP of +0.16%. According to our methodology, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
     
The online video streaming giant saw positive earnings estimate revision of 3 cents over the past 30 days for the to-be-reported quarter. Analysts raising estimates right before earnings — with the most up-to-date information possible — is a good indicator for the stock. Netflix is expected to post massive earnings growth of 47.1% and solid revenue growth of 16.3% for the to-be-reported quarter. However, the company’s earnings surprise history is unimpressive. It delivered a negative earnings surprise of 3.06%, on average, over the past four quarters.

The stock belongs to a top-ranked Zacks industry (placed at the top 24% of 250+ industries) with an impressive Momentum Score of A (see: all the Technology ETFs here).

The Zacks Consensus Estimate for the average target price is $630.06, with nearly 79% of the analysts giving a Strong Buy or a Buy rating ahead of the company’s earnings.

What’s Hot?

“Squid Game,” the hyper-buzzy Korean drama debuted on Sep 17, seems to be a big game changer for Netflix in the quarter ending September. This is especially true as the nine-episode thriller has become Netflix’s biggest-ever TV show with more than 111 million households around the world having already watched Squid Game, surpassing the 82 million households that watched Bridgerton in its first four weeks. With this, the drama is on track to deliver an astounding payback for the streaming service (read: Here's Why Internet ETFs Are Sizzling With Opportunities).

Per Bloomberg, this biggest original series launch is estimated to be worth almost $900 million for the streaming giant. As the buzz surrounding the series continues to grow, the analysts turned increasingly upbeat about its streaming content slate with most of them upgrading the stock.

After a slowdown in subscriber growth in the first half of 2021, many Wall Street analysts are expecting to see the start of a turnaround for Netflix heading into the final months of the year, citing a robust slate of content despite the increasingly competitive streaming landscape from the likes of Disney (DIS Quick QuoteDIS - Free Report) , Apple (AAPL Quick QuoteAAPL - Free Report) and Amazon (AMZN Quick QuoteAMZN - Free Report) .

ETFs in Focus

Ahead of its earnings report, investors could focus on ETFs having the largest allocation to this streaming giant. Below are five ETFs with the highest allocation to NFLX that could make compelling plays:

MicroSectors FANG+ ETN (FNGS Quick QuoteFNGS - Free Report)

This ETN is linked to the performance of the NYSE FANG+ Index, which is an equal-dollar-weighted index, designed to provide exposure to a group of highly traded growth stocks of next-generation technology and tech-enabled companies. It holds 10 stocks in its basket in equal proportion with Netflix share coming in at 10%. The product has accumulated $75.6 million in its asset base and charges 58 bps in annual fees. It trades in a paltry volume of 32,000 shares a day on average and a Zacks ETF Rank #3 (Hold) (read: ETFs to Buy on Tesla Record Q3 Delivery Numbers).

Multifactor Media and Communications ETF

This ETF targets a wide range of U.S. media and communication stocks to exploit the sector's opportunities by tracking the John Hancock Dimensional Media and Communications Index. It holds 55 stocks in its basket with NFLX taking the third spot at 5.6% share. JHCS has managed assets worth $19.9 million and charges 40 bps in annual fees. It trades in an average daily volume of under 1,000 shares.

Roundhill Streaming Services & Technology ETF

This ETF debuted in February and has amassed $24.2 million in its asset base. It is actively managed and offers exposure to the streaming industry. The fund consists of companies from across the globe that are actively involved in the business of streaming. It holds 38 stocks in its basket with Netflix occupying the top spot at 6.1% share. SUBZ charges 75 bps in annual fees and trades in an average daily volume of 14,000 shares (read: Should You Buy the Dip With These Top-Ranked Tech ETFs?).

Pacer BioThreat Strategy ETF (VIRS Quick QuoteVIRS - Free Report)

This fund seeks exposure to U.S. companies that provide their goods and services to the market by accomplishing one or more of the seven index themes. It tracks the LifeSci BioThreat Strategy Index, holding 51 stocks in its basket. Netflix occupies the top position with 5.9% of assets. The ETF accumulated $4.8 million in its asset base and charges 70 bps in annual fees. It trades in a paltry average daily volume of 500 shares.

Invesco Dynamic Media ETF

This fund provides exposure to companies engaged in the development, production, sale and distribution of goods or services used in the media industry by tracking the Dynamic Media Intellidex Index. It holds 32 stocks in the basket with Netflix taking the second position holding 5.5% allocation. The product has been able to manage $114.3 million in its asset base while sees a lower volume of about 14,000 shares a day. It has 0.63% in expense ratio and a Zacks ETF Rank #3 with a Medium risk outlook.