Netflix (NFLX), which reports first-quarter earnings after the close Thursday, is one of the best-positioned big tech companies in an uncertain economic environment dominated by President Trump’s trade wars.
“Netflix’s strong subscription model and key entertainment features, which have historically performed well during recessions, make it a defensive choice for investors amid recent market volatility,” Bank of America analyst Jessica Reif Ehrlich wrote Tuesday.
Netflix shares are up 9% year to date, outperforming big tech companies including Apple (AAPL), Amazon (AMZN) and Alphabet (GOOG, GOOGL), which are all down 17% or more year to date. The S&P 500 (^GSPC) is expected to fall about 9% through 2025.
Here are Wall Street’s first-quarter expectations, based on Bloomberg consensus estimates.
Revenue: $10.5 billion, compared to $9.37 billion a year ago; Netflix’s forecast: $10.42 billion
Earnings per share: $5.68, compared to $5.28 a year ago; Netflix’s forecast: $5.58
This will also be the first time Netflix will no longer report subscriber numbers as the company focuses on increasing user engagement and revenue growth. By the end of 2024, the company has 301.6 million subscribers worldwide. Netflix said in its fourth-quarter shareholder letter that it will disclose subscriber data in the future “when we cross key milestones.”
“Netflix has won the streaming wars. The writing is on the wall. Because [Netflix] has more content, it is able to drive better engagement, which leads to more subscribers and potentially better pricing power in a virtuous cycle,” MoffettNathanson analyst Robert Fishman wrote in a client note last month.
Netflix has set ambitious financial goals, including doubling revenue and reaching a $1 trillion valuation by 2030, according to the Wall Street Journal. The streaming company is currently valued at just over $400 billion.
“We believe investors should feel confident in Netflix’s ability to grow over the next few years if it can continue its strong subscriber growth trajectory,” Bank of America analyst Reif Ehrlich said in response to the Journal report. The analyst maintained a “buy” rating and $1,175 price target.
Netflix set a new all-time high for 2024, with revenue up 16% and operating margins surging 600 basis points to nearly 27%, about 300 basis points higher than expected at the beginning of the year.
The company added 41 million global subscribers last year, up from 36.6 million added during the COVID-19 surge in 2020.
Crackdowns on password sharing have helped boost subscriber numbers, and while the benefits of those crackdowns are expected to slow in the short term, the company expects its content to drive subscriber growth and its advertising tier to be a long-term catalyst for attracting new users.
Earlier this year, the company raised subscription prices for its various streaming plans in the U.S., including its ad-supported plans, and its $7.99 per month price remains one of the cheapest plans on the market.
Management said the decision to raise prices was made because its content “has never been better,” with more movies and TV shows expected in 2025. Several major series are expected to return later this year, including Stranger Things, Squidward, and Wednesday.
With the success of the Jake Paul vs. Mike Tyson match, the NFL Christmas fight, and the recent premiere of WWE Raw, sports and live events have become mainstream content in the Netflix ecosystem. There are rumors that the company may bid for the rights to the UFC next.
According to the latest data from Bloomberg, the median target price of Netflix by Wall Street analysts is only around $1,085 per share, with 45 ratings for buy, 13 for hold, and only 2 for sell.
