- Wednesday, October 16, 2024
In the past 12 months, the stock in Netflix has seen an impressive rally, soaring more than 50%. This success can be attributed to the company's commitment to curbing password sharing and their ability to capture the interest of consumers with lower-priced, ad-supported subscriptions.
This week, Netflix will be sharing updates on these achievements and more as they release their earnings report. Investors eagerly await this information, which will provide valuable insights into the company's performance.
For the December quarter, Netflix is projecting revenue of $8.7 billion. This represents a substantial 10.7% increase compared to the same period last year. It is also a significant improvement from the 7.8% growth seen in the previous quarter. Notably, it marks the first time in two years that the company is experiencing double-digit percentage growth in revenue. Additionally, Netflix expects to achieve a profit of $2.15 per share, a remarkable improvement from the mere 12 cents per share reported in the same quarter of the previous year. However, it is worth mentioning that this figure is slightly lower than the $3.73 per share reported in the prior quarter.
Netflix has demonstrated its ability to adapt and thrive in the streaming-video industry. With their ongoing efforts to combat password sharing and the consumer interest generated by their more affordable, ad-supported subscription options, the company is poised for continued success in the coming months.
Cautious Outlook for Netflix Shares
Another key area of focus is Netflix's efforts to crack down on password-sharing, as pointed out by Bazinet. Given the company's earlier projection of significant cash flows by 2024, investors will be interested in understanding its capital allocation plans.
Piper Sandler analyst Matt Farrell shares a similar outlook and advises caution. With the stock experiencing a significant 20% increase since the last earnings report, Farrell does not see it as an opportune time to buy. He also rates the stock at Neutral.
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