Netflix Q2 Earnings Preview: Key Points to Consider
Netflix is set to release its second-quarter financial results on July 19, 2023. The company’s recent initiatives, such as cracking down on password sharing and introducing ad-supported plans, are expected to drive its financial performance and paid membership base.
Q2 Expectations: Revenue Growth and Earnings Decline
The crackdown on password sharing and the introduction of the new ad plan are expected to contribute to the earnings, driven by higher average revenue per member in the U.S. However, the reduction in prices in certain countries to drive long-term adoption may impact short-term profitability, while tough year-over-year comparisons could also weigh on the results.
Website Traffic: Mixed Growth Signals
Netflix’s strong content lineup continues to drive engagement, a crucial factor for customer retention and growth. According to STA Resrach, NFLX experienced a decline in traffic on a sequential basis but witnessed an increase compared to the same quarter last year.
Analyst Outlook: Cautious Optimism
Loop Capital analyst Alan Gould raised the price target for NFLX to $425 from $330 but maintained a Hold recommendation due to the recent surge in share price. On the other hand, Deutsche Bank analyst Bryan Kraft reiterated a Buy recommendation and increased Netflix’s price target to $475 from $410. Kraft praised the company’s strong revenue, earnings, and free cash flow growth capabilities.
The crackdown on password sharing and the introduction of the new ad plan are expected to contribute to the earnings, driven by higher average revenue per member in the U.S. However, the reduction in prices in certain countries to drive long-term adoption may impact short-term profitability, while tough year-over-year comparisons could also weigh on the results.
Website Traffic: Mixed Growth Signals
Netflix’s strong content lineup continues to drive engagement, a crucial factor for customer retention and growth. According to STA Resrach, NFLX experienced a decline in traffic on a sequential basis but witnessed an increase compared to the same quarter last year.
Analyst Outlook: Cautious Optimism
Loop Capital analyst Alan Gould raised the price target for NFLX to $425 from $330 but maintained a Hold recommendation due to the recent surge in share price. On the other hand, Deutsche Bank analyst Bryan Kraft reiterated a Buy recommendation and increased Netflix’s price target to $475 from $410. Kraft praised the company’s strong revenue, earnings, and free cash flow growth capabilities.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
Read more
Comment
Sign in to post a comment
