Netflix Surges After Delivering Robust Q1 Earnings, Raises Q2 Outlook
Netflix (NFLX | +1.2%) kicked off earnings season with impressive first-quarter results, significantly outperforming Wall Street expectations.
The streaming giant posted earnings of $6.61 per share on revenue of $10.54 billion, comfortably surpassing analyst estimates of $5.28 per share and a slightly lower projected revenue of $10.5 billion.
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Netflix attributed this strong performance to a successful combination of recent subscription price increases, improved advertising revenue, and well-managed expenditure timing.
Looking ahead to the second quarter, Netflix anticipates continued momentum, projecting a revenue jump of 15% to $11.04 billion.
The company expects its operating margin to expand notably to 33.3%, an increase of over 6 percentage points compared to the same period last year, driven by sustained subscriber growth and higher ad revenues.
For the full fiscal year, Netflix reaffirmed its forecast for total revenues in the range of $43.5 billion to $44.5 billion, aiming to maintain an operating margin of 29%. Management also remains confident in generating around $8 billion in free cash flow for the year.
In the first quarter alone, Netflix repurchased approximately $3.5 billion worth of its shares, demonstrating confidence in its long-term value.
Investors welcomed the news enthusiastically, sending Netflix shares nearly 5% higher in after-hours trading.
ChartMill Fundamental Rating
- Profitability | 8/10
- Valuation | 4/10
- Growth | 7/10
- Financial Health | 8/10
- Dividend Policy | /
Overal FA Rating | 7/10
Taking everything into account, NFLX scores 7 out of 10 in our fundamental rating. NFLX was compared to 72 industry peers in the Entertainment industry.
NFLX scores excellent points on both the profitability and health parts. This is a solid base for a good stock. NFLX is not priced too expensively while it is growing strongly. Keep and eye on this one! These ratings would make NFLX suitable for growth and quality investing!
ChartMill Technical and Setup Rating
- Technical Rating | 8/10
- Setup Rating | 8/10
Taking everything into account, NFLX scores 8 out of 10 in our technical rating. NFLX has been one of the better performers in the overall market. Some doubts were observed in the medium time frame, but recent action was again very positive.
Besides having an excellent technical rating, NFLX also presents a decent setup pattern. Prices have been consolidating lately and the volatility has been reduced. There is very little resistance above the current price.
