Sign In
Sign In

Netflix Soars into Q2 Earnings: Will the Bull Run Continue?

HomeNetflix Soars into Q2 Earnings: Will the Bull Run Continue?

Netflix Soars into Q2 Earnings: Will the Bull Run Continue?

Netflix Soars into Q2 Earnings: Will the Bull Run Continue?

Summary

Netflix, the world's largest video-streaming company, is set to release its second-quarter 2025 results on July 17 after market close. The company has seen a strong trend in recent months, with shares rising about 29% over the past three months, outperforming the broader industry's growth of 25.1%. Analysts are bullish on Netflix, with an average brokerage recommendation (ABR) of 1.72 made by 45 brokerage firms, indicating that the company is expected to beat earnings estimates.

Fundamental Analysis

Netlix has a strong chance to beat earnings estimates, given its impressive track record of delivering earnings surprises. The company's Earnings ESP is +1.68%, and it has a Zacks Rank #2 (Buy), indicating a high probability of an earnings beat. According to our methodology, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) increases the chances of an earnings beat.

The online video-streaming giant saw a negative earnings revision of a penny over the past seven days for the to-be-reported quarter. However, it is expected to report substantial earnings growth of 44.7% and revenue growth of 15.6% for the to-be-reported quarter. The company's earnings surprise history is impressive, as it delivered an earnings surprise of 6.94% on average over the past four quarters.

Valuations

Netflix shares look expensive at current levels, with a P/E ratio of 49.65 versus 15.63 for the industry. However, it has a strong Growth Score of B, indicating that it is primed for more growth. This justifies its high valuation. Also, Netflix has become a popular defensive play in the current unsteady market.

ETFs in Focus

Several exchange-traded funds (ETFs) with significant allocations to Netflix are in focus ahead of its earnings release. These include:

  • First Trust Dow Jones Internet Index Fund (FDN)
  • FT Vest Dow Jones Internet & Target Income ETF (FDND)
  • MicroSectors FANG+ ETN (FNGS)
  • Communication Services Select Sector SPDR Fund (XLC)
  • Invesco Next Gen Media and Gaming ETF (GGME)

These ETFs offer exposure to the broad technology space, with Netflix occupying a significant position in their respective portfolios.

Analysts' Expectations

Analysts are bullish on Netflix, with an average brokerage recommendation (ABR) of 1.72 made by 45 brokerage firms. Out of them, 27 are Strong Buy and three are Buy. The average price target for Netflix comes to $1,239.18, ranging from a low of $800 to a high of $1,600.

Some analysts have raised their target prices on the stock ahead of the earnings release. BMO Capital lifted the target price to $1,425 from $1,200, while Piper Sandler raised its price target to $1,400, citing upbeat management commentary and higher revenue expectations for the third quarter of 2025.

Story Continues

The company remains unscathed by the ongoing tariff chaos as the entertainment industry shows its resilience in tough economic times. Netflix's low-cost advertising-supported subscriptions and live sports expansion will continue to fuel growth.

The streaming giant offered an upbeat outlook for the ongoing quarter on its last earnings call, expecting revenues to grow 15% year over year to $11.04 billion, while earnings per share are expected to rise 44% to $7.03.

Conclusion

In conclusion, Netflix is set to release its second-quarter 2025 results on July 17 after market close, with analysts bullish on the company's prospects. The online video-streaming giant has seen a strong trend in recent months, with shares rising about 29% over the past three months. Analysts expect Netflix to beat earnings estimates, given its impressive track record of delivering earnings surprises.

The company's valuations look expensive at current levels, but it has a strong Growth Score of B, indicating that it is primed for more growth. Several exchange-traded funds (ETFs) with significant allocations to Netflix are in focus ahead of its earnings release.

As the entertainment industry shows its resilience in tough economic times, Netflix's low-cost advertising-supported subscriptions and live sports expansion will continue to fuel growth. With an upbeat outlook for the ongoing quarter and a strong track record of delivering earnings surprises, investors should keep a close eye on Netflix's second-quarter 2025 results.