Netflix's stock poised to reach new highs following strong Q2 results and positive analyst response.

From MarketBeat: 2024-07-19 10:50:08

Netflix’s stock price corrected about 5% ahead of its Q2 earnings release, but the results were robust, featuring growth, margin expansion, and a forecast for increased capital returns, driving higher stock prices. Analysts have responded favorably, leading to new highs, with an upward price target revision.

Netflix reported impressive Q2 results, with net revenue of $9.56 billion and a 16% increase in paid memberships, led by a 34% increase in ad-tier membership. Operating margin widened by 500 basis points, leading to accelerated income and earnings growth. Guidance for Q2 is tepid but expects 14% YoY growth.

Despite the positive news, Netflix’s share prices may move lower due to sector rotation impacting tech stocks. The critical target for support is near $635, with a rebound expected to begin soon if that level holds. The company’s leverage remains low, allowing for continued investment in growth and capital returns, including share repurchases.

In a challenging market environment, Netflix’s solid news may not drive a strong rally. Analysts forecast higher prices and new all-time highs, with a critical support target at $635. If Netflix shares fall below that level, they could find solid support at $600. Guidance remains strong for the long-term outlook, with revenue guidance increased for the full year.



Read more at MarketBeat: Netflix Stock Can Set New Highs This Year