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Netflix (NFLX - Free Report) is set to release second-quarter 2024 results on Jul 18 after market close. It is worth taking a look at the fundamentals of the world’s largest video-streaming company ahead of its results.
Netflix shares have risen about 7% in the past three months, slightly outperforming the broader industry’s rise of 6.3% in the same time frame. The trend could continue if Netflix delivers blowout results and records continued subscriber growth (read: Q2 Earnings on Track to Reach Record Highs: ETFs to Tap).
Image Source: Zacks Investment Research
As a result, ETFs with the largest allocation to this streaming giant like MicroSectors FANG+ ETN (FNGS - Free Report) , Invesco Next Gen Media and Gaming ETF (GGME - Free Report) , First Trust Dow Jones Internet Index Fund (FDN - Free Report) , Pacer BioThreat Strategy ETF (VIRS - Free Report) and First Trust S-Network Streaming & Gaming ETF (BNGE - Free Report) are in focus.
Earnings Whispers
Netflix has an Earnings ESP of 0.00% and a Zacks Rank #2 (Buy). According to our methodology, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The online video-streaming giant saw no earnings estimate revision over the past seven or 30 days for the to-be-reported quarter. Netflix is expected to record earnings growth of 42.9% and revenue growth of 16.4% for the to-be-reported quarter. The company’s earnings surprise history is impressive, as it delivered an earnings surprise of 9.26%, on average, over the past four quarters. Netflix belongs to a bottom-ranked Zacks industry (placed at the bottom 18% of 250+ industries).
Netflix currently has an average brokerage recommendation (ABR) of 1.91 on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell etc.) made by 39 brokerage firms. Of the 39 recommendations deriving the current ABR, 21 are Strong Buy and two are Buy. Strong Buy and Buy, respectively, account for 53.85% and 5.13% of all recommendations.
Based on short-term price targets offered by 34 analysts, the average price target for Netflix comes to $655.24. The forecasts range from a low of $450.00 to a high of $800.00.
What to Watch?
Netflix has been finding favor with analysts ahead of its second-quarter earnings. JPMorgan, KeyBanc and TD Cowen lifted their target price on the stock, citing continued momentum for strong subscriber growth. Netflix has an attractive content lineup scheduled for the second half of 2024, including high-profile releases such as the NFL, Squid Game, Night Agent and Cobra Kai.
The streaming giant has expanded into live and sports programming this year, encroaching on traditional TV’s domain. It announced several deals in recent months to expand its sports entertainment offerings, including Christmas Day National Football League (NFL) games and World Wrestling Entertainment (WWE) events. JPMorgan expects Netflix to add more sports content as the firm works to grow its subscriber base and ad sales.
Netflix expects revenues to grow 16% year over year to $9.49 billion and earnings per share of $4.68 for the second quarter.
MicroSectors FANG+ ETN is linked to the performance of the NYSE FANG+ Index, which is an equal-dollar-weighted index. It is designed to provide exposure to a group of highly traded growth stocks of next-generation technology and tech-enabled companies. It holds 10 stocks in its basket in equal proportion, with Netflix’s share coming in at 10% (read: Can Mega-Cap Tech's AI Boom Continue in 2H24?).
MicroSectors FANG+ ETN has accumulated $383.6 million in its asset base and charges 58 bps in annual fees. It trades in a moderate volume of 124,000 shares a day on average and has a Zacks ETF Rank #3 (Hold).
Invesco Next Gen Media and Gaming ETF offers exposure to companies with significant exposure to technologies or products that contribute to future media through direct revenues. It tracks the STOXX World AC NexGen Media Index, holding 89 stocks in its basket. Netflix is the third firm, accounting for 7.7% of the GGME assets.
Invesco Next Gen Media and Gaming ETF has amassed $39.3 million in its asset base and charges 60 bps in annual fees. It has a Zacks ETF Rank #3.
First Trust Dow Jones Internet Index Fund (FDN - Free Report)
First Trust Dow Jones Internet Index Fund follows the Dow Jones Internet Composite Index, giving investors exposure to the broad Internet industry. It holds about 41 stocks in its basket, with Netflix occupying the third spot at 6.3%.
First Trust Dow Jones Internet Index Fund is the most popular and liquid ETF in the broad technology space, with AUM of $6 billion and an average daily volume of around 269,000 shares. FDN charges 51 bps in fees per year and has a Zacks ETF Rank #1 (Strong Buy) with a High risk outlook.
Pacer BioThreat Strategy ETF seeks exposure to U.S. companies that provide their goods and services to the market by accomplishing one or more of the seven index themes. It tracks the LifeSci BioThreat Strategy Index, holding 56 stocks in its basket. Netflix occupies the eighth position with 4.7% of the assets.
Pacer BioThreat Strategy ETF has accumulated $3.7 million in its asset base and charges 70 bps in annual fees. It trades in a meager average daily volume of 100 shares and has a Zacks ETF Rank #3.
First Trust S-Network Streaming & Gaming ETF tracks the S-Network Streaming & Gaming Index and holds 45 stocks in its basket. Netflix takes the eighth spot, accounting for 4.4% of the assets. From a sector look, entertainment takes the largest share at 42.5%, while hotels, restaurants & leisure, semiconductors & semiconductor equipment, and interactive media & services round off the next three spots with double-digit exposure each.
First Trust S-Network Streaming & Gaming ETF has accumulated $5.3 million in its asset base and trades in an average daily volume of under 1,000 shares. It charges 70 bps in annual fees.
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Netflix ETFs in Focus Ahead of Q2 Earnings
Netflix (NFLX - Free Report) is set to release second-quarter 2024 results on Jul 18 after market close. It is worth taking a look at the fundamentals of the world’s largest video-streaming company ahead of its results.
Netflix shares have risen about 7% in the past three months, slightly outperforming the broader industry’s rise of 6.3% in the same time frame. The trend could continue if Netflix delivers blowout results and records continued subscriber growth (read: Q2 Earnings on Track to Reach Record Highs: ETFs to Tap).
Image Source: Zacks Investment Research
As a result, ETFs with the largest allocation to this streaming giant like MicroSectors FANG+ ETN (FNGS - Free Report) , Invesco Next Gen Media and Gaming ETF (GGME - Free Report) , First Trust Dow Jones Internet Index Fund (FDN - Free Report) , Pacer BioThreat Strategy ETF (VIRS - Free Report) and First Trust S-Network Streaming & Gaming ETF (BNGE - Free Report) are in focus.
Earnings Whispers
Netflix has an Earnings ESP of 0.00% and a Zacks Rank #2 (Buy). According to our methodology, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The online video-streaming giant saw no earnings estimate revision over the past seven or 30 days for the to-be-reported quarter. Netflix is expected to record earnings growth of 42.9% and revenue growth of 16.4% for the to-be-reported quarter. The company’s earnings surprise history is impressive, as it delivered an earnings surprise of 9.26%, on average, over the past four quarters. Netflix belongs to a bottom-ranked Zacks industry (placed at the bottom 18% of 250+ industries).
Netflix, Inc. Price, Consensus and EPS Surprise
Netflix, Inc. price-consensus-eps-surprise-chart | Netflix, Inc. Quote
Netflix currently has an average brokerage recommendation (ABR) of 1.91 on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell etc.) made by 39 brokerage firms. Of the 39 recommendations deriving the current ABR, 21 are Strong Buy and two are Buy. Strong Buy and Buy, respectively, account for 53.85% and 5.13% of all recommendations.
Based on short-term price targets offered by 34 analysts, the average price target for Netflix comes to $655.24. The forecasts range from a low of $450.00 to a high of $800.00.
What to Watch?
Netflix has been finding favor with analysts ahead of its second-quarter earnings. JPMorgan, KeyBanc and TD Cowen lifted their target price on the stock, citing continued momentum for strong subscriber growth. Netflix has an attractive content lineup scheduled for the second half of 2024, including high-profile releases such as the NFL, Squid Game, Night Agent and Cobra Kai.
The streaming giant has expanded into live and sports programming this year, encroaching on traditional TV’s domain. It announced several deals in recent months to expand its sports entertainment offerings, including Christmas Day National Football League (NFL) games and World Wrestling Entertainment (WWE) events. JPMorgan expects Netflix to add more sports content as the firm works to grow its subscriber base and ad sales.
Netflix expects revenues to grow 16% year over year to $9.49 billion and earnings per share of $4.68 for the second quarter.
ETFs in Focus
MicroSectors FANG+ ETN (FNGS - Free Report)
MicroSectors FANG+ ETN is linked to the performance of the NYSE FANG+ Index, which is an equal-dollar-weighted index. It is designed to provide exposure to a group of highly traded growth stocks of next-generation technology and tech-enabled companies. It holds 10 stocks in its basket in equal proportion, with Netflix’s share coming in at 10% (read: Can Mega-Cap Tech's AI Boom Continue in 2H24?).
MicroSectors FANG+ ETN has accumulated $383.6 million in its asset base and charges 58 bps in annual fees. It trades in a moderate volume of 124,000 shares a day on average and has a Zacks ETF Rank #3 (Hold).
Invesco Next Gen Media and Gaming ETF (GGME - Free Report)
Invesco Next Gen Media and Gaming ETF offers exposure to companies with significant exposure to technologies or products that contribute to future media through direct revenues. It tracks the STOXX World AC NexGen Media Index, holding 89 stocks in its basket. Netflix is the third firm, accounting for 7.7% of the GGME assets.
Invesco Next Gen Media and Gaming ETF has amassed $39.3 million in its asset base and charges 60 bps in annual fees. It has a Zacks ETF Rank #3.
First Trust Dow Jones Internet Index Fund (FDN - Free Report)
First Trust Dow Jones Internet Index Fund follows the Dow Jones Internet Composite Index, giving investors exposure to the broad Internet industry. It holds about 41 stocks in its basket, with Netflix occupying the third spot at 6.3%.
First Trust Dow Jones Internet Index Fund is the most popular and liquid ETF in the broad technology space, with AUM of $6 billion and an average daily volume of around 269,000 shares. FDN charges 51 bps in fees per year and has a Zacks ETF Rank #1 (Strong Buy) with a High risk outlook.
Pacer BioThreat Strategy ETF (VIRS - Free Report)
Pacer BioThreat Strategy ETF seeks exposure to U.S. companies that provide their goods and services to the market by accomplishing one or more of the seven index themes. It tracks the LifeSci BioThreat Strategy Index, holding 56 stocks in its basket. Netflix occupies the eighth position with 4.7% of the assets.
Pacer BioThreat Strategy ETF has accumulated $3.7 million in its asset base and charges 70 bps in annual fees. It trades in a meager average daily volume of 100 shares and has a Zacks ETF Rank #3.
First Trust S-Network Streaming & Gaming ETF (BNGE - Free Report)
First Trust S-Network Streaming & Gaming ETF tracks the S-Network Streaming & Gaming Index and holds 45 stocks in its basket. Netflix takes the eighth spot, accounting for 4.4% of the assets. From a sector look, entertainment takes the largest share at 42.5%, while hotels, restaurants & leisure, semiconductors & semiconductor equipment, and interactive media & services round off the next three spots with double-digit exposure each.
First Trust S-Network Streaming & Gaming ETF has accumulated $5.3 million in its asset base and trades in an average daily volume of under 1,000 shares. It charges 70 bps in annual fees.