Netflix, Inc. NFLX is set to report second-quarter earnings with a positive trend expected. In the first quarter, revenues were $10.5 billion, up 13%, with an EPS of $6.61, a 25% rise. Second-quarter projections include $11.04 billion in revenues, a 15.4% increase, and an EPS of $7.03, up 44.1%. Operating margins are also expected to rise.

Netflix’s trailing four-quarter earnings surprise averages 6.9%, indicating potential stock price growth post-earnings. However, with a high P/E ratio of 49.62, there may be limited post-earnings growth potential if expectations are already high. Investors should be prepared for a potential sell-off if Netflix fails to meet or exceed projections.

Netflix’s long-term outlook appears positive despite short-term price fluctuations. The company’s move to launch a low-cost, ad-supported tier has been successful, with ad revenues expected to double by 2025. With a potential $650 billion revenue growth opportunity in the streaming industry, Netflix is well-positioned for further growth.

Netflix’s management is optimistic about the company’s future, aiming for a $1 trillion valuation by 2030. The company has a Zacks Rank #2 (Buy) and boasts a net profit margin of 23.1%, outperforming the industry’s negative 15.9%. Investors should focus on Netflix’s long-term growth potential and consider buying the stock now.

Read more at Nasdaq: Should You Buy, Hold, or Sell Netflix Stock Ahead of Q2 Earnings?