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Netflix (NFLX - Free Report) is set to release fourth-quarter 2022 results on Jan 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 35.8% over the past three months compared to the industry’s average gain of 15.8%. The solid trend might continue, given reasonable chances of an earnings beat and positive earnings revisions, which are generally a precursor to an earnings beat ahead of its Q4 report.
As a result, ETFs with the largest allocation to this streaming giant, like MicroSectors FANG+ ETN (FNGS - Free Report) , ProShares Nasdaq-100 Dorsey Wright Momentum ETF (QQQA - Free Report) , Invesco Dynamic Media ETF , First Trust S-Network Streaming & Gaming ETF (BNGE - Free Report) and Pacer BioThreat Strategy ETF (VIRS - Free Report) , are in focus.
Earnings Whispers
Netflix has a Zacks Rank #3 (Hold) and an Earnings ESP of +21.23%. 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 a penny over the past 30 days for the to-be-reported quarter. Analysts increasing estimates right before earnings — with the most up-to-date information possible — is a good indicator for the stock (read: 5 Tech ETFs Riding High on Sectors' Comeback to Start 2023).
Netflix is expected to post earnings decline of 66.2% and a modest revenue growth of 1.7% for the to-be-reported quarter. The company’s earnings surprise history is impressive as it delivered an earnings surprise of 35.09%, on average, over the past four quarters. Netflix belongs to a bottom-ranked Zacks industry (placed at the bottom 22% of 250+ industries).
The Zacks Consensus Estimate for the average target price is $303.85, with nearly 49% of the analysts giving a Strong Buy or a Buy rating ahead of the company’s earnings.
What to Watch?
After two straight quarters of subscriber losses, the world's largest video-streaming company returned to growth in the third quarter. The trend is likely to continue, with 4.5 million subscriber additions expected in the fourth quarter. Growth will likely be driven by an improving content slate and the recent launch of the cheaper ad-supported subscription plan, which went live in early November.
MicroSectors FANG+ 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%.
MicroSectors FANG+ ETN has accumulated $49.5 million in its asset base and charges 58 bps in annual fees. It trades in a paltry volume of 23,000 shares a day on average and has a Zacks ETF Rank #3 (Hold) (read: Tesla Delivers Record Q4 But Misses View: ETFs in Focus).
ProShares Nasdaq-100 Dorsey Wright Momentum ETF is the first ETF focusing on select Nasdaq-100 stocks identified as having the greatest potential to outperform. It follows the Nasdaq-100 Dorsey Wright Momentum Index and holds 21 stocks in its basket, with Netflix occupying the third spot at 6.01%.
ProShares Nasdaq-100 Dorsey Wright Momentum ETF has managed assets worth $11 million and trades in an average daily volume of 3,000 shares. It charges 58 bps in annual fees.
Invesco Dynamic Media ETF
Invesco Dynamic Media ETF 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 spot accounting for a 5.5% allocation.
Invesco Dynamic Media ETF has been able to manage $37.4 million in its asset base while seeing a lower volume of about 15,000 shares a day. It has 0.63% in expense ratio and a Zacks ETF Rank #3 with a Medium risk outlook.
First Trust S-Network Streaming and Gaming ETF (BNGE - Free Report)
First Trust S-Network Streaming & Gaming ETF offers exposure to companies in one of the following business segments, namely content streaming, e-sports, iGaming and tracks the S-Network Streaming & Gaming Index. It holds 47 stocks in its basket, with Netflix occupying the second position with a 5.3% share. Entertainment takes the largest share at 44.5%, while hotels, restaurants & leisure, and semiconductors & semiconductor equipment round off the next two spots with double-digit exposure each (see: all the Technology ETFs here).
First Trust S-Network Streaming & Gaming ETF has accumulated $3.8 million in its asset base since its inception on Jan 25 while trading in an average daily volume of 1,000 shares. It charges 70 bps in annual fees.
Pacer BioThreat Strategy ETF 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 fourth position with 5% of assets.
Pacer BioThreat Strategy ETF accumulated $3.6 million in its asset base and charges 70 bps in annual fees. It trades in a paltry average daily volume of 300 shares and has a Zacks ETF Rank #3.
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Netflix Set to Beat Q4 Earnings: ETFs to Buy
Netflix (NFLX - Free Report) is set to release fourth-quarter 2022 results on Jan 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 35.8% over the past three months compared to the industry’s average gain of 15.8%. The solid trend might continue, given reasonable chances of an earnings beat and positive earnings revisions, which are generally a precursor to an earnings beat ahead of its Q4 report.
As a result, ETFs with the largest allocation to this streaming giant, like MicroSectors FANG+ ETN (FNGS - Free Report) , ProShares Nasdaq-100 Dorsey Wright Momentum ETF (QQQA - Free Report) , Invesco Dynamic Media ETF , First Trust S-Network Streaming & Gaming ETF (BNGE - Free Report) and Pacer BioThreat Strategy ETF (VIRS - Free Report) , are in focus.
Earnings Whispers
Netflix has a Zacks Rank #3 (Hold) and an Earnings ESP of +21.23%. 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 a penny over the past 30 days for the to-be-reported quarter. Analysts increasing estimates right before earnings — with the most up-to-date information possible — is a good indicator for the stock (read: 5 Tech ETFs Riding High on Sectors' Comeback to Start 2023).
Netflix is expected to post earnings decline of 66.2% and a modest revenue growth of 1.7% for the to-be-reported quarter. The company’s earnings surprise history is impressive as it delivered an earnings surprise of 35.09%, on average, over the past four quarters. Netflix belongs to a bottom-ranked Zacks industry (placed at the bottom 22% of 250+ industries).
The Zacks Consensus Estimate for the average target price is $303.85, with nearly 49% of the analysts giving a Strong Buy or a Buy rating ahead of the company’s earnings.
What to Watch?
After two straight quarters of subscriber losses, the world's largest video-streaming company returned to growth in the third quarter. The trend is likely to continue, with 4.5 million subscriber additions expected in the fourth quarter. Growth will likely be driven by an improving content slate and the recent launch of the cheaper ad-supported subscription plan, which went live in early November.
ETFs in Focus
MicroSectors FANG+ ETN (FNGS - Free Report)
MicroSectors FANG+ 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%.
MicroSectors FANG+ ETN has accumulated $49.5 million in its asset base and charges 58 bps in annual fees. It trades in a paltry volume of 23,000 shares a day on average and has a Zacks ETF Rank #3 (Hold) (read: Tesla Delivers Record Q4 But Misses View: ETFs in Focus).
ProShares Nasdaq-100 Dorsey Wright Momentum ETF (QQQA - Free Report)
ProShares Nasdaq-100 Dorsey Wright Momentum ETF is the first ETF focusing on select Nasdaq-100 stocks identified as having the greatest potential to outperform. It follows the Nasdaq-100 Dorsey Wright Momentum Index and holds 21 stocks in its basket, with Netflix occupying the third spot at 6.01%.
ProShares Nasdaq-100 Dorsey Wright Momentum ETF has managed assets worth $11 million and trades in an average daily volume of 3,000 shares. It charges 58 bps in annual fees.
Invesco Dynamic Media ETF
Invesco Dynamic Media ETF 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 spot accounting for a 5.5% allocation.
Invesco Dynamic Media ETF has been able to manage $37.4 million in its asset base while seeing a lower volume of about 15,000 shares a day. It has 0.63% in expense ratio and a Zacks ETF Rank #3 with a Medium risk outlook.
First Trust S-Network Streaming and Gaming ETF (BNGE - Free Report)
First Trust S-Network Streaming & Gaming ETF offers exposure to companies in one of the following business segments, namely content streaming, e-sports, iGaming and tracks the S-Network Streaming & Gaming Index. It holds 47 stocks in its basket, with Netflix occupying the second position with a 5.3% share. Entertainment takes the largest share at 44.5%, while hotels, restaurants & leisure, and semiconductors & semiconductor equipment round off the next two spots with double-digit exposure each (see: all the Technology ETFs here).
First Trust S-Network Streaming & Gaming ETF has accumulated $3.8 million in its asset base since its inception on Jan 25 while trading in an average daily volume of 1,000 shares. It charges 70 bps in annual fees.
Pacer BioThreat Strategy ETF (VIRS - Free Report)
Pacer BioThreat Strategy ETF 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 fourth position with 5% of assets.
Pacer BioThreat Strategy ETF accumulated $3.6 million in its asset base and charges 70 bps in annual fees. It trades in a paltry average daily volume of 300 shares and has a Zacks ETF Rank #3.