NFLX Surged, Is This the End of Dark Days for Trading?

Following the streaming giant’s release of far better-than-anticipated Q3 earnings, shares of Netflix (NASDAQ: NFLX) are trading about 13% higher Wednesday morning.

Netflix beat the Street estimate, expecting an EPS of $2.18 on sales of $7.85B, reporting an EPS of $3.10 on revenue of $7.93. In contrast to the 1M predicted, the firm announced 2.41M worldwide streaming paid net additions. More than the 221.7M anticipated, streaming paid subscriptions totaled 223.09M, an increase of 4.5% yearly.

What to Expect from NFLX Movements?

Experts anticipated an increase of 3.9 million paying customers. However, Netflix predicts 4.5M worldwide streaming paid net additions this quarter. Netflix expects earnings per share (EPS) of $0.36 on sales of $7.78B compared to the Street’s expectation of an EPS of $1.12 on revenue of $7.97B. 227.59 million streaming paid subscriptions are anticipated, more than the initial projection of 225.7M.

Netflix is upbeat about its new advertising business. However, it doesn’t anticipate a significant contribution in Q4 this year. It will be introducing its Basic with Ads plan around that time. JPMorgan analysts upgraded Netflix from Neutral to Overweight with a price target increase from $240 to $330 per share.

Following the release of the third quarter’s earnings, they said that they have a greater conviction in NFLX’s capacity to accelerate revenue growth with the support of advertising and the monetization of account sharing, improve operating margins, and raise FCF.

Wolfe Research analysts increased the price target from $251 to $305 per share. This reflects improved medium-term subscriber and ARPU projections. According to a client note from Wolfe analysts, Netflix’s 3Q results demonstrated that its subscriber growth engine still works and that the 1H’22 breakdown related mostly to price increases and post-lockdown normalization, which have largely run their courses. After startlingly negative net adds in 1H and a “right full rudder” move toward advertising.

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