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Will Netflix Beat or Miss on Q4 Earnings? ETFs in Focus
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The pioneer in the streaming space Netflix (NFLX - Free Report) is scheduled to report fourth-quarter 2023 results on Jan 23 after market close. Netflix projects another quarter of subscriber growth as the company is benefiting from growing subscriber base thanks to a robust portfolio.
Crackdown on password-sharing and the introduction of paid sharing in more than 100 countries, which represents more than 80% of Netflix’s revenue base, is also expected to aid growth. Netflix’s diversified content portfolio, which is attributable to heavy investments in the production and distribution of localized, foreign-language content, has been driving its growth prospects. We expect 2023 net sales to rise 6.2% from 2022.
ETFs having a substantial allocation to Netflix like MicroSectors FANG+ ETN (FNGS - Free Report) , Invesco Next Gen Media and Gaming ETF (GGME - Free Report) , REX FANG & Innovation Equity Premium Income ETF (FEPI - Free Report) and First Trust S-Network Streaming and Gaming ETF (BNGE - Free Report) are in focus ahead of its fourth-quarter earnings. These ETFs hold 9.18%, 8.14%, 6.49% and 5.51% of the stock, respectively.
Subscriber Growth in the Cards?
Wedbush Securities Managing Director of Equity Research Michael Pachter anticipates that Netflix will exceed its target of 8.75 million new subscribers, potentially surpassing it by 1-2 million, as quoted on Yahoo Finance.
A survey indicated significant traction for Netflix's new strategies mentioned above. Notably, 15% of subscribers notified about password sharing opted to add another account. The ad-supported subscription tier saw a substantial increase from 15 million to 23 million subscribers in the quarter, reducing potential churn.
Earnings Whispers
Netflix has an Earnings ESP of +0.51% and a Zacks Rank #2 (Buy). 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.
Netflix has a solid VGM score of B. Netflix 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. One analyst upped estimate in the past seven days.
The Zacks Consensus Estimate for the fourth quarter indicates a substantial year-over-year growth in earnings and revenue growth of 11%. The earnings track record of the company is moderate. It delivered a four-quarter average earnings surprise of -12.16% as it missed expectations in December 2022 quarter by a huge margin. However, Netflix’s past three quarters’ earnings surprises have been positive.
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Will Netflix Beat or Miss on Q4 Earnings? ETFs in Focus
The pioneer in the streaming space Netflix (NFLX - Free Report) is scheduled to report fourth-quarter 2023 results on Jan 23 after market close. Netflix projects another quarter of subscriber growth as the company is benefiting from growing subscriber base thanks to a robust portfolio.
Crackdown on password-sharing and the introduction of paid sharing in more than 100 countries, which represents more than 80% of Netflix’s revenue base, is also expected to aid growth. Netflix’s diversified content portfolio, which is attributable to heavy investments in the production and distribution of localized, foreign-language content, has been driving its growth prospects. We expect 2023 net sales to rise 6.2% from 2022.
ETFs having a substantial allocation to Netflix like MicroSectors FANG+ ETN (FNGS - Free Report) , Invesco Next Gen Media and Gaming ETF (GGME - Free Report) , REX FANG & Innovation Equity Premium Income ETF (FEPI - Free Report) and First Trust S-Network Streaming and Gaming ETF (BNGE - Free Report) are in focus ahead of its fourth-quarter earnings. These ETFs hold 9.18%, 8.14%, 6.49% and 5.51% of the stock, respectively.
Subscriber Growth in the Cards?
Wedbush Securities Managing Director of Equity Research Michael Pachter anticipates that Netflix will exceed its target of 8.75 million new subscribers, potentially surpassing it by 1-2 million, as quoted on Yahoo Finance.
A survey indicated significant traction for Netflix's new strategies mentioned above. Notably, 15% of subscribers notified about password sharing opted to add another account. The ad-supported subscription tier saw a substantial increase from 15 million to 23 million subscribers in the quarter, reducing potential churn.
Earnings Whispers
Netflix has an Earnings ESP of +0.51% and a Zacks Rank #2 (Buy). 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.
Netflix has a solid VGM score of B. Netflix 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. One analyst upped estimate in the past seven days.
The Zacks Consensus Estimate for the fourth quarter indicates a substantial year-over-year growth in earnings and revenue growth of 11%. The earnings track record of the company is moderate. It delivered a four-quarter average earnings surprise of -12.16% as it missed expectations in December 2022 quarter by a huge margin. However, Netflix’s past three quarters’ earnings surprises have been positive.