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Netflix Earnings Estimates Show Positive Trend

Netflix (NFLX) has recently shown resilience with a slight decline of only -1.7%, outperforming the S&P 500's -3.6%. The current EPS estimate for Netflix remains strong, indicating potential price support driven by earnings estimate revisions.

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AI Rating:   8

Netflix (NFLX) continues to attract investor interest, demonstrated by its outperformance relative to the broader S&P 500 index. In the last month, Netflix shares declined by -1.7%, a less severe drop than the S&P 500, which fell by -3.6%. This relative strength may establish a baseline for potential rebounds in its stock price.

Earnings Per Share (EPS): The expected EPS for the upcoming quarter is set at $5.74, which indicates an 8.7% year-over-year growth. Additionally, for the current fiscal year, the consensus estimate is $24.58, reflecting a substantial 24% growth, while the next fiscal year shows an estimated EPS of $29.66, or a 20.7% increase. This consistent upward trend in EPS estimates coupled with historical earnings beat suggests strong operational momentum for Netflix.

Project Revenue Growth: A significant aspect of any investment is a company's revenue growth. For Netflix, projected revenue for the current quarter is $10.54 billion, representing an anticipated growth of 12.5% year-over-year. Furthermore, estimates for the current and next fiscal years stand at $44.47 billion and $49.59 billion, approximating increases of 14% and 11.5%, respectively. This revenue trajectory supports the EPS growth, as earnings are likely to rise in tandem with stronger sales.

Valuation Concerns: Despite positive earnings and revenue outlooks, Netflix currently has a Zacks Value Style Score of D, indicating potential overvaluation relative to peers. This could limit immediate price appreciation and may pose risks for valuations as the market adjusts, especially if broader economic conditions shift.

In summary, while Netflix's positive earnings revisions and anticipated revenue growth paint a favorable picture, the high valuation could temper enthusiasm. Nevertheless, the current Zacks Rank of #2 (Buy) signals a robust confidence in Netflix’s forthcoming quarters, suggesting investors may find it worthwhile to monitor these trends closely.

Stocks:  NFLX