Positive. Multiple factors to drive Q2 results, but stock considered overvalued.

From Nasdaq: 2024-07-05 01:11:18

Netflix stock has risen by 38% YTD, outperforming Disney’s 8%. Q2 FY’24 results on July 18 may show continued customer base growth, with expected earnings of $4.75 per share and revenues of $9.60 billion, up 16.5% YoY. Netflix benefits from its ad-supported tier and crackdown on password sharing. Operating margins for Q2 are guided at 26.6%. NFLX stock has seen gains over the years but has been inconsistent, underperforming the S&P 500 in 2021 and 2022. Trefis’ High-Quality Portfolio has outperformed the S&P each year. While Netflix stock could see a slight increase post-earnings, it is currently overvalued at a forward P/E of 40x. Economic trends like slowing consumer spending and rising unemployment could impact Netflix’s performance going forward. We have a price estimate of $528 for Netflix, about 22% below the current market price. The cumulative total returns for Netflix since the end of 2016 are 444%, compared to 145% for the S&P 500. Consider investing with Trefis Market-Beating Portfolios for better returns.

Sources: NASDAQ, Trefis



Read more at Nasdaq: Rising Margins, Ad Growth To Drive Netflix’s Q2 Results, But Stock Is Expensive At $670