Netflix Stock Poised for Growth Following Strong Earnings Report

Netflix (NFLX) is showing remarkable resilience amid economic challenges, as evidenced by the streaming giant’s robust first-quarter earnings report,  Investor’s Business Daily reports.

The company’s stock saw a notable increase in after-hours trading on Thursday, reflecting investor optimism.

Co-Chief Executive Greg Peters highlighted that Netflix has not experienced significant impacts from the economic disruption caused by tariffs and trade disputes. In a webcast with analysts, he mentioned that the company had not observed notable changes in subscriber churn or a shift to lower-tier service plans, despite broader economic pressures.

“We’re paying close attention to consumer sentiment and the overall economy,” Peters said. “But based on our current business operations, there’s nothing significant to report at this point.”

One factor that could provide Netflix with greater stability in a potentially weaker macroeconomic environment is its low-cost advertising-supported service plan. This new offering is expected to be a cushion should market conditions worsen, Peters added.

In the first quarter, Netflix reported earnings of $6.61 per share, marking a 25% increase year-over-year, and revenue of $10.54 billion, up 12.5%. Both figures surpassed analysts’ expectations.

Looking ahead, Netflix projects earnings of $7.03 per share for the current quarter, reflecting a 44% year-over-year increase, with revenue expected to reach $11.04 billion, up 15%. The company’s guidance also exceeded Wall Street’s forecasts.

In technical terms, Netflix’s stock has formed a double-bottom base, with a buy point of 998.70, according to IBD MarketSurge charts. If after-hours gains from Thursday continue into Monday’s regular session (with markets closed Friday for Good Friday), the stock is poised for a breakout. As of Thursday’s extended trading session, Netflix shares had risen by 3.5%, closing at 1,006.79.

Following the earnings report, several Wall Street analysts raised their price targets for Netflix stock. Pivotal Research Group’s Jeffrey Wlodarczak raised his price target to 1,350 from 1,250, citing Netflix’s ability to consistently deliver strong financial results while its competitors face significant losses. Similarly, BMO Capital Markets analyst Brian Pitz raised his target to 1,200 from 1,175, expressing optimism about Netflix’s expanding advertising business, which he believes will become a significant revenue and earnings driver.

Netflix launched its advertising technology suite in the U.S. and Canada on April 1, with plans to roll it out in 10 additional international markets during the second quarter. The new suite is designed to provide better audience targeting and improved measurement capabilities, which are expected to attract more advertisers.

During the analyst call, Netflix executives addressed a recent Wall Street Journal article revealing that the company aims to double its revenue by 2030. Co-CEO Ted Sarandos clarified that the goal was an internal aspiration rather than an official forecast. He emphasized that Netflix is focused on long-term growth and is committed to becoming the most loved and valued entertainment company for its stakeholders.

Netflix remains a key player on several IBD stock lists, including Big Cap 20, IBD 50, and Stock Spotlight. The company is also featured on the IBD Leaderboard watchlist for potential inclusion.