EARNINGS PRIMER: Netflix (NFLX) earnings due 18th July at 21:00BST/16:00EDT
Analysis details (20:35)
Netflix (NFLX) Q2 2024 (USD): EPS (exp. 4.74), Revenue (exp. 9.53bln).
COMMENTARY:
- In Netflix's last quarterly earnings report, the Co. warned of a potential dip in subscribers in Q2 due to “seasonality” and its crackdown on password sharing.
- Netflix also said that it plans to stop reporting subscriber stats starting in Q1 '25, signalling a shift in focus from subscriber growth to profit. However, JPM analyst Anmuth, who raised his PT to USD 750 on Friday, believes NFLX will report 5-6mln net new subs for Q2.
- Elsewhere, in May, NFLX noted that its ad plan has since grown to 40mln active users and 40% of all new signups are for its USD 6.99 ad-supported tier.
- Plans to launch an in-house advertising technology platform by the end of next year, whereby GS estimates NFLX could generate almost USD 3bln in ad revenue in 2024.
- Overall, earnings estimates have been revised higher since prior earnings release.
- Option Traders are pricing in an 8.9% move, and the stock has averaged a 9.3% move in recent quarters.
GEOGRAPHICAL REVENUE BREAKDOWN:
- US (exp. 4.28bln).
- EMEA (exp. 3.02bln).
- LatAm (exp. 1.18bln).
- APAC (exp. 1.04bln).
KEY METRICS:
- Free cash flow (exp. 1.61bln).
- Net income (exp. 2.01bln).
- Pre-tax profit (exp. 2.43bln).
- Cash flow from operations (exp. 1.77bln).
NET SUBSCRIBER ADDITIONS (exp. 4.9bln, -16.8% Y/Y).
- EMEA (exp. 1.5bln).
- APAC (exp. 1.3bln).
- LatAm (exp. 830mln).
- US and Canada (exp. 1.19bln).
Q3 2024 GUIDANCE:
- EPS (exp. 4.76).
- Revenue (exp. 9.78bln).
- Net subscriber additions (exp. 5.1bln).
FY24 GUIDANCE:
- EPS (exp. 18.37).
- Revenue (exp. 38.71bln).
- Net subscriber additions (exp. 26.53bln).
CURRENT BROKER RECOMMENDATIONS:
- Strong Buy: 11
- Buy: 18.
- Hold: 16.
- Sell: 1.
PRICING:
- Current share price: 656.32.
- Median share price target: 682.50.
18 Jul 2024 - 20:35- EquitiesResearch Sheet- Source: Newsquawk
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