Netflix (NFLX) Q2 ’24 Earnings Preview: Revenue, EPS, and Growth Expectations
As the world’s best investment manager and financial market’s journalist, I am excited to share with you the upcoming earnings report for Netflix (NASDAQ: NFLX) on Thursday, July 18 ’24. The street consensus is expecting the following:
– Revenue: $9.53 billion for expected 16% y-o-y growth
– Operating income: $2.43 billion for expected 33% y-o-y growth
– EPS: $4.72 for expected y-o-y growth of 43%
Netflix has been on a positive trajectory with subscriber growth exceeding expectations in recent quarters, despite the decision to stop reporting subscriber and ARPU metrics. In Q1 ’24, 9.3 million new subscribers were added, surpassing the 4.8 million expected. Additionally, the advertising business within the NFLX model is growing at a remarkable rate of 65% – 70% sequentially every quarter.
Looking ahead, management expects in-line revenue for Q2 ’24 and a slightly lower operating margin compared to Q1 ’24. The company has guided for 13% – 15% revenue growth for the full-year ’24, slightly conservative to the consensus.
In terms of valuation, Netflix is considered a growth stock and is currently trading at $656 per share, with a forward PE ratio of 36x based on ’24 EPS. The company’s cash-flow and free-cash-flow have shown significant improvement since bottoming in mid-’22, with TTM cash flow at $7.3 billion and TTM FCF at $6.9 billion.
From a technical analysis standpoint, $700 is a key level for Netflix, representing a significant milestone for the stock’s performance.
In conclusion, while growth and momentum stocks may face challenges, Netflix’s long-term outlook remains positive. The company’s expansion into advertising and focus on increasing average revenue per user are key drivers for future growth. With the addition of live sporting events and endorsements from industry leaders like Bob Iger, Netflix continues to solidify its position as a leader in the streaming industry.
For investors, it’s important to monitor Netflix’s performance, especially in non-US markets where growth potential lies. The stock may experience fluctuations, but focusing on the business fundamentals and long-term prospects is key to successful investing in Netflix.
Overall, Netflix’s innovative approach and competitive edge in the streaming market make it a compelling investment opportunity for those looking to capitalize on the future of entertainment. Title: Unprecedented Market Volatility: Expert Investment Manager’s Insights
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