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Netflix ETFs to Buy on the Dip Post Solid Q1 Earnings
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Netflix (NFLX - Free Report) reported robust first-quarter 2024 results after the closing bell on Thursday. The world's largest video-streaming company topped both earnings and revenue estimates and delivered its strongest first-quarter customer additions since the pandemic. However, it issued disappointing second-quarter revenue guidance, which dragged the stock down m more than 5% in after-hours trading.
Investors could tap the dip through ETFs with the largest allocation to this streaming giant. These funds include MicroSectors FANG+ ETN (FNGS - Free Report) , Invesco Next Gen Media and Gaming ETF (GGME - Free Report) , Pacer BioThreat Strategy ETF (VIRS - Free Report) , First Trust S-Network Streaming & Gaming ETF (BNGE - Free Report) and First Trust Dow Jones Internet Index Fund (FDN - Free Report) .
Q1 Earnings in Detail
The company reported earnings per share of $5.28, which outpaced the Zacks Consensus Estimate by 77 cents and improved from the year-ago earnings of $2.88. Revenues rose 15% year over year to $9.37 billion and were above the consensus estimate of $9.26 billion (read: 5 Favorite Sector ETFs of Q1 Earnings).
The streaming giant added 9.3 million subscribers in the first quarter, taking the global membership to 270 million subscribers. Subscriber growth more than quadrupled from 1.8 million reported in the year-ago quarter and reflects the best start to the year since 2020, thanks to a strong slate of original programs and a crackdown on password sharing. Series such as Griselda, 3 Body Problem, Avatar: The Last Airbender, Love Is Blind S6, American Nightmare and Dave Chappelle: The Dreamer, as well as films like Damsel, Lift and The Greatest Night in Pop, drew immense investors' interest during the quarter.
Netflix has also expanded into live and sports programming this year, encroaching on traditional TV’s domain. In February, Netflix aired its first-ever awards show, the Screen Actors’ Guild Awards, and announced a 10-year deal to air “WWE Raw” live, valued at more than $5 billion.
The streaming giant expects revenues to grow 16% year over year to $9.49 billion and earnings per share of $4.68 for the second quarter. The Zacks Consensus Estimate is pegged at $9.55 billion for revenues and $4.53 for earnings per share. For the full year, revenues are expected to grow 13-15% year over year.
MicroSectors FANG+ ETN is linked to the performance of the NYSE FANG+ Index, which is an equal-dollar-weighted index. It is 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: 5 ETFs Leading the Tech Rebound: Will the Rally Continue?).
MicroSectors FANG+ ETN has accumulated $255.9 million in its asset base and charges 58 bps in annual fees. It trades in a moderate volume of 146,000 shares a day on average and has a Zacks ETF Rank #3 (Hold).
Invesco Next Gen Media and Gaming ETF offers exposure to companies with significant exposure to technologies or products that contribute to future media through direct revenues. It tracks the STOXX World AC NexGen Media Index, holding 94 stocks in its basket. Netflix is the top firm, accounting for 8.6% of the GGME assets.
Invesco Next Gen Media and Gaming ETF has amassed $30.3 million in its asset base and charges 60 bps in annual fees. It trades in an average daily volume of 3,000 shares and has a Zacks ETF Rank #2 (read: 5 Top-Ranked ETFs at New Highs Set to Soar Further).
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 55 stocks in its basket. Netflix occupies the second position with 5.9% of the assets.
Pacer BioThreat Strategy ETF has accumulated $3.4 million in its asset base and charges 70 bps in annual fees. It trades in a meager average daily volume of 100 shares and has a Zacks ETF Rank #3.
First Trust S-Network Streaming & Gaming ETF tracks the S-Network Streaming & Gaming Index and holds 46 stocks in its basket. Netflix takes the fourth spot, accounting for 5.5% of the assets. From a sector look, entertainment takes the largest share at 44.9%, 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 $5 million in its asset base and trades in an average daily volume of under 1,000 shares. It charges 70 bps in annual fees.
First Trust Dow Jones Internet Index Fund (FDN - Free Report)
First Trust Dow Jones Internet Index Fund follows the Dow Jones Internet Composite Index, giving investors exposure to the broad Internet industry. It holds about 41 stocks in its basket, with Netflix occupying the fourth spot at 5.4%.
First Trust Dow Jones Internet Index Fund is the most popular and liquid ETF in the broad technology space, with AUM of $6 billion and an average daily volume of around 389,000 shares. FDN charges 52 bps in fees per year and has a Zacks ETF Rank #2 (Buy) with a High risk outlook.
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Netflix ETFs to Buy on the Dip Post Solid Q1 Earnings
Netflix (NFLX - Free Report) reported robust first-quarter 2024 results after the closing bell on Thursday. The world's largest video-streaming company topped both earnings and revenue estimates and delivered its strongest first-quarter customer additions since the pandemic. However, it issued disappointing second-quarter revenue guidance, which dragged the stock down m
more than 5% in after-hours trading.
Investors could tap the dip through ETFs with the largest allocation to this streaming giant. These funds include MicroSectors FANG+ ETN (FNGS - Free Report) , Invesco Next Gen Media and Gaming ETF (GGME - Free Report) , Pacer BioThreat Strategy ETF (VIRS - Free Report) , First Trust S-Network Streaming & Gaming ETF (BNGE - Free Report) and First Trust Dow Jones Internet Index Fund (FDN - Free Report) .
Q1 Earnings in Detail
The company reported earnings per share of $5.28, which outpaced the Zacks Consensus Estimate by 77 cents and improved from the year-ago earnings of $2.88. Revenues rose 15% year over year to $9.37 billion and were above the consensus estimate of $9.26 billion (read: 5 Favorite Sector ETFs of Q1 Earnings).
The streaming giant added 9.3 million subscribers in the first quarter, taking the global membership to 270 million subscribers. Subscriber growth more than quadrupled from 1.8 million reported in the year-ago quarter and reflects the best start to the year since 2020, thanks to a strong slate of original programs and a crackdown on password sharing. Series such as Griselda, 3 Body Problem, Avatar: The Last Airbender, Love Is Blind S6, American Nightmare and Dave Chappelle: The Dreamer, as well as films like Damsel, Lift and The Greatest Night in Pop, drew immense investors' interest during the quarter.
Netflix has also expanded into live and sports programming this year, encroaching on traditional TV’s domain. In February, Netflix aired its first-ever awards show, the Screen Actors’ Guild Awards, and announced a 10-year deal to air “WWE Raw” live, valued at more than $5 billion.
The streaming giant expects revenues to grow 16% year over year to $9.49 billion and earnings per share of $4.68 for the second quarter. The Zacks Consensus Estimate is pegged at $9.55 billion for revenues and $4.53 for earnings per share. For the full year, revenues are expected to grow 13-15% year over year.
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. It is 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: 5 ETFs Leading the Tech Rebound: Will the Rally Continue?).
MicroSectors FANG+ ETN has accumulated $255.9 million in its asset base and charges 58 bps in annual fees. It trades in a moderate volume of 146,000 shares a day on average and has a Zacks ETF Rank #3 (Hold).
Invesco Next Gen Media and Gaming ETF (GGME - Free Report)
Invesco Next Gen Media and Gaming ETF offers exposure to companies with significant exposure to technologies or products that contribute to future media through direct revenues. It tracks the STOXX World AC NexGen Media Index, holding 94 stocks in its basket. Netflix is the top firm, accounting for 8.6% of the GGME assets.
Invesco Next Gen Media and Gaming ETF has amassed $30.3 million in its asset base and charges 60 bps in annual fees. It trades in an average daily volume of 3,000 shares and has a Zacks ETF Rank #2 (read: 5 Top-Ranked ETFs at New Highs Set to Soar Further).
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 55 stocks in its basket. Netflix occupies the second position with 5.9% of the assets.
Pacer BioThreat Strategy ETF has accumulated $3.4 million in its asset base and charges 70 bps in annual fees. It trades in a meager average daily volume of 100 shares and has a Zacks ETF Rank #3.
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 46 stocks in its basket. Netflix takes the fourth spot, accounting for 5.5% of the assets. From a sector look, entertainment takes the largest share at 44.9%, 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 $5 million in its asset base and trades in an average daily volume of under 1,000 shares. It charges 70 bps in annual fees.
First Trust Dow Jones Internet Index Fund (FDN - Free Report)
First Trust Dow Jones Internet Index Fund follows the Dow Jones Internet Composite Index, giving investors exposure to the broad Internet industry. It holds about 41 stocks in its basket, with Netflix occupying the fourth spot at 5.4%.
First Trust Dow Jones Internet Index Fund is the most popular and liquid ETF in the broad technology space, with AUM of $6 billion and an average daily volume of around 389,000 shares. FDN charges 52 bps in fees per year and has a Zacks ETF Rank #2 (Buy) with a High risk outlook.