Netflix(NFLX) ZACKS·2025-01-20 17:01Core Viewpoint - Netflix is expected to report strong earnings growth and revenue growth in its upcoming fourth-quarter results, with a significant increase in subscriber additions anticipated due to a robust content lineup [5][7]. Financial Performance - Netflix shares have increased by 11% over the past three months, outperforming the broader industry's growth of 5.5% during the same period [2]. - The company is projected to achieve earnings growth of 98.6% and revenue growth of 14.5% for the fourth quarter [5]. - For the full year, revenues are expected to grow at the higher end of the previous guidance of 14-15% year-over-year [9]. Earnings Expectations - Netflix has an Earnings ESP of +0.19% and a Zacks Rank of 3 (Hold), indicating a reasonable chance of beating earnings expectations [4]. - The company has a history of delivering an average earnings surprise of 5.73% over the past four quarters [5]. Analyst Recommendations - Analysts maintain a bullish outlook on Netflix, with an average brokerage recommendation of 1.91 from 41 firms, including 23 Strong Buy ratings [6]. - The average price target for Netflix is $889.81, with estimates ranging from $650.00 to $1,100.00 [6]. Subscriber Growth - Netflix anticipates higher subscriber additions in the fourth quarter compared to the previous year, with expectations for subscriber growth to double from the third quarter [7]. Valuation Metrics - Netflix shares are currently valued with a P/E ratio of 36.70, significantly higher than the industry average of 10.86, but the company has a strong Growth Score of A, justifying its high valuation [10]. ETFs in Focus - Several ETFs with significant allocations to Netflix include MicroSectors FANG+ ETN (10% allocation), Invesco Next Gen Media and Gaming ETF (7.7%), and First Trust Dow Jones Internet Index Fund (7.6%) [3][11][15]. - The MicroSectors FANG+ ETN has an asset base of $427.9 million, while the First Trust Dow Jones Internet Index Fund has $6.7 billion in assets [12][16].