We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
ETFs to Add Gains on Netflix Q2 Solid Subscriber Growth
Read MoreHide Full Article
Netflix (NFLX - Free Report) reported mixed second-quarter 2023 results after the closing bell on Tuesday. The world's largest video streaming company topped earnings estimates while lagging on revenues. It also provided a downbeat revenue guidance.
The revenue miss and a weaker-than-expected revenue forecast pushed shares of Netflix down as much as 10% in after-hours trading. This has put ETFs with the largest allocation to this streaming giant like MicroSectors FANG+ ETN (FNGS - Free Report) , Invesco Dynamic Media ETF , ProShares Nasdaq-100 Dorsey Wright Momentum ETF (QQQA - Free Report) , First Trust S-Network Streaming & Gaming ETF (BNGE - Free Report) and Pacer BioThreat Strategy ETF (VIRS - Free Report) in focus.
Q2 Earnings in Detail
The company reported earnings per share of $3.29, outpacing the Zacks Consensus Estimate by 46 cents and improving from the year-ago earnings of $3.20. Revenues rose 2.7% year over year to $8.19 billion and were slightly below the estimate of $8.27 billion.
Netflix added 5.89 million subscribers in the second quarter, taking the global membership to 238.4 million subscribers at the end of the quarter. The growth was fueled by a large number of sign-ups after the streaming giant cracked down on password sharing and the launch of a cheaper $6.99 per month advertising tier.
The company’s Q2 film slate, including Murder Mystery 2, The Mother, and Extraction 2 as well as TV series like Bridgerton season 1, Never Have I Ever season 1, and The Witcher, was a big success (read: Netflix Target Price Up Ahead of Q2 Earnings: ETFs in Focus).
Netflix anticipates paid net subscriber additions in the third quarter to be similar to the second quarter. It expects revenue growth to accelerate in the second half of the year as it will see “the full benefits” of its password-sharing crackdown and steady growth in its ad-supported plan. Additionally, the company will continue to create compelling shows and movies, improve monetization, boost its video game business and make user experience better.
This year, the company will have more returning seasons than any other streamer with The Crown, Top Boy, The Upshaws, Sweet Magnolias, Heartstopper, Virgin River, Too Hot To Handle and more. The streaming giant expects revenues to grow 7.5% to $8.52 billion and earnings per share of $3.52 for the third quarter. The Zacks Consensus Estimate is pegged at $8.63 billion for revenues and $3.14 for earnings per share.
MicroSectors FANG+ ETN is linked to the performance of the NYSE FANG+ Index, 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’s share coming in at 10% (read: Best & Worst ETF Areas of First Half 2023).
MicroSectors FANG+ ETN has accumulated $140.8 million in its asset base and charges 58 bps in annual fees. It trades in a moderate volume of 153,000 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 second spot and accounting for 5.6% allocation.
Invesco Dynamic Media ETF has been able to manage $33.7 million in its asset base while seeing a lower volume of about 4,000 shares a day. It has 0.63% in expense ratio and a Zacks ETF Rank #4 (Sell) with a Medium risk outlook.
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 5.5% (read: ETFs in Focus as Nasdaq 100 Undergoes Rejiggering).
ProShares Nasdaq-100 Dorsey Wright Momentum ETF has managed assets worth $11.3 million and trades in an average daily volume of 2,000 shares. It charges 58 bps in annual fees.
First Trust S-Network Streaming & Gaming ETF tracks the S-Network Streaming & Gaming Index and holds 44 stocks in its basket. Netflix is the second firm, accounting for 5.2% of the assets. From a sector look, entertainment takes the largest share at 45%, while hotels, restaurants & leisure, semiconductors & semiconductor equipment, and interactive media & services round off the next three spots with double-digit exposure each.
First Trust S-Network Streaming & Gaming ETF has accumulated $4.7 million in its asset base and trades in average daily volume of under 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 52 stocks in its basket. Netflix occupies the third position with 5.1% of the assets.
Pacer BioThreat Strategy ETF has accumulated $3.9 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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
ETFs to Add Gains on Netflix Q2 Solid Subscriber Growth
Netflix (NFLX - Free Report) reported mixed second-quarter 2023 results after the closing bell on Tuesday. The world's largest video streaming company topped earnings estimates while lagging on revenues. It also provided a downbeat revenue guidance.
The revenue miss and a weaker-than-expected revenue forecast pushed shares of Netflix down as much as 10% in after-hours trading. This has put ETFs with the largest allocation to this streaming giant like MicroSectors FANG+ ETN (FNGS - Free Report) , Invesco Dynamic Media ETF , ProShares Nasdaq-100 Dorsey Wright Momentum ETF (QQQA - Free Report) , First Trust S-Network Streaming & Gaming ETF (BNGE - Free Report) and Pacer BioThreat Strategy ETF (VIRS - Free Report) in focus.
Q2 Earnings in Detail
The company reported earnings per share of $3.29, outpacing the Zacks Consensus Estimate by 46 cents and improving from the year-ago earnings of $3.20. Revenues rose 2.7% year over year to $8.19 billion and were slightly below the estimate of $8.27 billion.
Netflix added 5.89 million subscribers in the second quarter, taking the global membership to 238.4 million subscribers at the end of the quarter. The growth was fueled by a large number of sign-ups after the streaming giant cracked down on password sharing and the launch of a cheaper $6.99 per month advertising tier.
The company’s Q2 film slate, including Murder Mystery 2, The Mother, and Extraction 2 as well as TV series like Bridgerton season 1, Never Have I Ever season 1, and The Witcher, was a big success (read: Netflix Target Price Up Ahead of Q2 Earnings: ETFs in Focus).
Netflix anticipates paid net subscriber additions in the third quarter to be similar to the second quarter. It expects revenue growth to accelerate in the second half of the year as it will see “the full benefits” of its password-sharing crackdown and steady growth in its ad-supported plan. Additionally, the company will continue to create compelling shows and movies, improve monetization, boost its video game business and make user experience better.
This year, the company will have more returning seasons than any other streamer with The Crown, Top Boy, The Upshaws, Sweet Magnolias, Heartstopper, Virgin River, Too Hot To Handle and more.
The streaming giant expects revenues to grow 7.5% to $8.52 billion and earnings per share of $3.52 for the third quarter. The Zacks Consensus Estimate is pegged at $8.63 billion for revenues and $3.14 for earnings per share.
ETFs in Focus
MicroSectors FANG+ ETN (FNGS - Free Report)
MicroSectors FANG+ ETN is linked to the performance of the NYSE FANG+ Index, 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’s share coming in at 10% (read: Best & Worst ETF Areas of First Half 2023).
MicroSectors FANG+ ETN has accumulated $140.8 million in its asset base and charges 58 bps in annual fees. It trades in a moderate volume of 153,000 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 second spot and accounting for 5.6% allocation.
Invesco Dynamic Media ETF has been able to manage $33.7 million in its asset base while seeing a lower volume of about 4,000 shares a day. It has 0.63% in expense ratio and a Zacks ETF Rank #4 (Sell) with a Medium risk outlook.
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 5.5% (read: ETFs in Focus as Nasdaq 100 Undergoes Rejiggering).
ProShares Nasdaq-100 Dorsey Wright Momentum ETF has managed assets worth $11.3 million and trades in an average daily volume of 2,000 shares. It charges 58 bps in annual fees.
First Trust S-Network Streaming & Gaming ETF (BNGE - Free Report)
First Trust S-Network Streaming & Gaming ETF tracks the S-Network Streaming & Gaming Index and holds 44 stocks in its basket. Netflix is the second firm, accounting for 5.2% of the assets. From a sector look, entertainment takes the largest share at 45%, while hotels, restaurants & leisure, semiconductors & semiconductor equipment, and interactive media & services round off the next three spots with double-digit exposure each.
First Trust S-Network Streaming & Gaming ETF has accumulated $4.7 million in its asset base and trades in average daily volume of under 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 52 stocks in its basket. Netflix occupies the third position with 5.1% of the assets.
Pacer BioThreat Strategy ETF has accumulated $3.9 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.