Netflix (NFLX) Postmarket Earnings Today After +43.6% Rally From Lows
Netflix (NFLX) earnings are due this afternoon, as the streaming giant reassess its situation after losing out against its archrival Paramount Skydance (PSKY) to acquire Warner Bros. Discovery (WBD). The Street’s expectations are for NFLX to come in with $0.81 EPS against last year’s figure of $0.66 (+22.7%) and $12.17B revenue vs. $10.54B (+15.4%).
The all-out bidding war between NFLX and PSKY had enough drama and twists for its own original TV series, with Paramount perhaps achieving a pyrrhic victory after sealing the costly $111B acquisition (a cash payment of $31 per WBD share) while Netflix reaped a $2.8B breakup payment from the failed deal. The collapse of the deal also resulted in an abrupt upside swing for Netflix after months of steady declines beginning with the Oct. 21 earnings and eventually resulting in a roughly -39% move at the 52-week lows of 75.01 on Feb. 23. But shares are now up 43.6% from that point as of yesterday’s close, filling a small gap from Dec. 2 and closing near the highs yesterday at 107.71.
Although Netflix no longer reports direct subscriber numbers, analysts track strong growth through its biannual engagement report. However, Netflix also in March announced a bump in subscription prices – the second in under two years. The Standard plan with Ads saw a $1 increase to $8.99/month, while the Standard and Premium plans both rose $2 to $19.99/month and $26.99/month, respectively.
Analysts seem more bullish on Netflix heading into earnings, as this week saw price target increases from Keybanc ($115 from $108, kept overweight), MoffettNathanson ($120 from $115, kept buy), Deutsche Bank ($100 from $98, kept hold), and Wedbush ($118 from $115, kept outperform). Wedbush noted consistent quarter-over-quarter topline growth and looked favorably on domestic price increases, saying Netflix’s ad revenue could at least double to approximately $3B in 2026 with “significant opportunities remaining in 2027 and beyond.”
Netflix’s chart offers an interesting technical picture with price remaining in a tight, narrow upward channel that began in mid-March. Momentum commonly slows heading into earnings as traders grow wary of establishing new positions into an event risk situation, but Netflix’s Relative Strength Index (RSI) shows it making new highs along with price and moving further into the overbought area. Notable upside areas to watch include a relative high near 110 from early December and a double-top around 116, both of which align with the post-earnings gap down from October. To the downside, the 100 level stands out as another area to watch as it represents a closing high after a gap down on Dec. 1 and a subsequent high, as well as the 90.50 level.
Meanwhile, the options market is looking for a potential expected move of +/-7.1 (6.7%) for the monthly Apr. 17 expiration, while the next monthly expiration on May 15 projects a +/-10.6 range (9.8%).
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