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Netflix (NFLX - Free Report) is set to release first-quarter 2023 results on Apr 18 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 15% so far this year compared to the industry’s average gain of 9.1%. The solid trend might continue, if Netflix comes up with an earnings beat in Q1 (read: 5 ETFs to Bet on From the Favorite Sectors for Q1 Earnings).
As a result, ETFs with the largest allocation to this streaming giant, like MicroSectors FANG+ ETN (FNGS - Free Report) , Invesco Dynamic Media ETF , Alger 35 ETF (ATFV - Free Report) , ProShares Nasdaq-100 Dorsey Wright Momentum ETF (QQQA - 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 -0.57%. 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 no earnings estimate revision over the past 30 days for the to-be-reported quarter. It is expected to post an earnings decline of 20.4% and a modest revenue growth of 4% for the to-be-reported quarter. Though Netflix is the clear leader in the streaming video market, it is struggling to show meaningful growth given a weak economy, increasingly aggressive competition, and an apparently saturated U.S. market for streaming.
The company’s earnings surprise history is impressive as it delivered an earnings surprise of 0.92%, on average, over the past four quarters. Netflix belongs to a bottom-ranked Zacks industry (placed at the bottom 27% of 250+ industries).
The Zacks Consensus Estimate for the average target price is $322.55, with nearly 50% of the analysts giving a Strong Buy or a Buy rating ahead of the company’s earnings.
What to Watch?
The streaming giant, in its last earnings call, said it sees a "modest" increase in new additions, with earnings of $2.82 per share and revenues of $8.17 billion for the first quarter of 2023. In February, Netflix cut subscription prices in over three dozen countries and cracked down on password sharing scheme. Investors will keep watch on the impact of these changes on profitability and revenues.
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% (read: 5 Tech Stocks That Powered Nasdaq ETF in the First Quarter).
MicroSectors FANG+ ETN has accumulated $61.6 million in its asset base and charges 58 bps in annual fees. It trades in a paltry volume of 54,000 shares a day on average and has a Zacks ETF Rank #3 (Hold).
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 fourth spot accounting for a 5.2% allocation.
Invesco Dynamic Media ETF has been able to manage $32.5 million in its asset base while seeing a lower volume of about 3,000 shares a day. It has 0.63% in expense ratio and a Zacks ETF Rank #3 with a Medium risk outlook.
Alger 35 ETF is actively managed and invests in a focused portfolio of approximately 35 holdings of primarily U.S. companies of any capitalization identified through the fundamental research as demonstrating promising growth potential. Netflix takes the fourth position with 4.8% of the total assets.
Alger 35 ETF has accumulated $9.4 million in its asset base and trades in a volume of under 500 shares on average. It charges 55 bps in annual fees from investors.
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 ninth spot at 5%.
ProShares Nasdaq-100 Dorsey Wright Momentum ETF has managed assets worth $10.5 million and trades in an average daily volume of 2,000 shares. It charges 58 bps in annual fees (read: Nasdaq-100 Enters Bull Market: ETFs to Ride on).
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 5.1% of assets.
Pacer BioThreat Strategy ETF accumulated $3.7 million in its asset base and charges 70 bps in annual fees. It trades in a paltry average daily volume of 100 shares and has a Zacks ETF Rank #3.
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What's in Store for Netflix ETFs in Q1?
Netflix (NFLX - Free Report) is set to release first-quarter 2023 results on Apr 18 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 15% so far this year compared to the industry’s average gain of 9.1%. The solid trend might continue, if Netflix comes up with an earnings beat in Q1 (read: 5 ETFs to Bet on From the Favorite Sectors for Q1 Earnings).
As a result, ETFs with the largest allocation to this streaming giant, like MicroSectors FANG+ ETN (FNGS - Free Report) , Invesco Dynamic Media ETF , Alger 35 ETF (ATFV - Free Report) , ProShares Nasdaq-100 Dorsey Wright Momentum ETF (QQQA - 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 -0.57%. 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 no earnings estimate revision over the past 30 days for the to-be-reported quarter. It is expected to post an earnings decline of 20.4% and a modest revenue growth of 4% for the to-be-reported quarter. Though Netflix is the clear leader in the streaming video market, it is struggling to show meaningful growth given a weak economy, increasingly aggressive competition, and an apparently saturated U.S. market for streaming.
The company’s earnings surprise history is impressive as it delivered an earnings surprise of 0.92%, on average, over the past four quarters. Netflix belongs to a bottom-ranked Zacks industry (placed at the bottom 27% of 250+ industries).
The Zacks Consensus Estimate for the average target price is $322.55, with nearly 50% of the analysts giving a Strong Buy or a Buy rating ahead of the company’s earnings.
What to Watch?
The streaming giant, in its last earnings call, said it sees a "modest" increase in new additions, with earnings of $2.82 per share and revenues of $8.17 billion for the first quarter of 2023. In February, Netflix cut subscription prices in over three dozen countries and cracked down on password sharing scheme. Investors will keep watch on the impact of these changes on profitability and revenues.
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% (read: 5 Tech Stocks That Powered Nasdaq ETF in the First Quarter).
MicroSectors FANG+ ETN has accumulated $61.6 million in its asset base and charges 58 bps in annual fees. It trades in a paltry volume of 54,000 shares a day on average and has a Zacks ETF Rank #3 (Hold).
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 fourth spot accounting for a 5.2% allocation.
Invesco Dynamic Media ETF has been able to manage $32.5 million in its asset base while seeing a lower volume of about 3,000 shares a day. It has 0.63% in expense ratio and a Zacks ETF Rank #3 with a Medium risk outlook.
Alger 35 ETF (ATFV - Free Report)
Alger 35 ETF is actively managed and invests in a focused portfolio of approximately 35 holdings of primarily U.S. companies of any capitalization identified through the fundamental research as demonstrating promising growth potential. Netflix takes the fourth position with 4.8% of the total assets.
Alger 35 ETF has accumulated $9.4 million in its asset base and trades in a volume of under 500 shares on average. It charges 55 bps in annual fees from investors.
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 ninth spot at 5%.
ProShares Nasdaq-100 Dorsey Wright Momentum ETF has managed assets worth $10.5 million and trades in an average daily volume of 2,000 shares. It charges 58 bps in annual fees (read: Nasdaq-100 Enters Bull Market: ETFs to Ride on).
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 5.1% of assets.
Pacer BioThreat Strategy ETF accumulated $3.7 million in its asset base and charges 70 bps in annual fees. It trades in a paltry average daily volume of 100 shares and has a Zacks ETF Rank #3.