Netflix Stock Is Headed to $450 Following Earnings

Netflix Stock Is Headed to $450 Following Earnings

NFLX), like the remainder of the market, has gotten a bit frothy these days. NFLX inventory is up 114% to date this 12 months, outstripping all of it’s friends on the S&P 500 Index. The query many buyers have to ask themselves this week is: Can NFLX inventory prolong its rally after Monday’s earnings report?” data-reactid=”11″>Netflix (NASDAQ:NFLX), like the remainder of the market, has gotten a bit frothy these days. NFLX inventory is up 114% to date this 12 months, outstripping all of it’s friends on the S&P 500 Index. The query many buyers have to ask themselves this week is: Can NFLX inventory prolong its rally after Monday’s earnings report?

It’s not a straightforward query to reply. NFLX inventory is clearly a momentum play for any right-minded bull heading into subsequent week’s report. With a price-to-earnings ratio of greater than 280, how may or not it’s the rest? The inventory’s lofty heights have even began to weigh on some Netflix bulls.

Analyst Eric Sheridan said in a note to clients that every one the positives Netflix has going for it are already priced into the shares. Sheridan nonetheless lifted his worth goal to $425 from $375 although, including a little bit of a blended sign to the downgrade.” data-reactid=”13″>This morning, UBS downgraded NFLX inventory to “neutral” from “buy.” Analyst Eric Sheridan said in a note to clients that every one the positives Netflix has going for it are already priced into the shares. Sheridan nonetheless lifted his worth goal to $425 from $375 although, including a little bit of a blended sign to the downgrade.

InvestorPlace – Stock Market News, Stock Advice & Trading Tips” data-reactid=”14″>InvestorPlace – Stock Market News, Stock Advice & Trading Tips

The remainder of Wall Street stays decidedly bullish on NFLX inventory. According to Thomson/First Call, 25 of the 41 analysts following the shares fee them a “buy” or higher. The consensus 12-month worth goal rests at $371.76, nonetheless, and will see some extra upward revisions both forward of or after earnings.

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As for Netflix’s earnings report, Wall Street is anticipating a revenue of 79 cents per share, up considerably from the 15 cents per share it earned in the identical quarter final 12 months. Revenue is predicted to rise 41.four% to $three.94 billion.” data-reactid=”28″>
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As for Netflix’s earnings report, Wall Street is anticipating a revenue of 79 cents per share, up considerably from the 15 cents per share it earned in the identical quarter final 12 months. Revenue is predicted to rise 41.four% to $three.94 billion.

Real expectations could also be larger, nonetheless. EarningsWhispers.com experiences a second-quarter whisper quantity for Netflix at 81 cents per share. Should Netflix shock to the upside and meet this whisper quantity, the following rally may ship NFLX inventory north of $500 in a rush.

But subscriber development will, as soon as once more, be the massive story for Netflix. Analysts are anxious that the U.S. market could also be oversaturated, and that geopolitical points will gradual worldwide development. Netflix is  at present in roughly 56% of U.S. broadband households and 46% of complete U.S. households. Internationally, Netflix’s subscriber base is rising quickly in India and elsewhere.

Turning to the choices crowd, July implied volatility is pricing in practically a 10% transfer for NFLX inventory following subsequent week’s earnings. This locations the higher sure at $458 and the decrease sure at $378. In the top, NFLX nonetheless has loads of momentum — even UBS admitted that with its price-target improve. Here’s how to play a post-earnings surge.

2 Trades for NFLX Stock

As typical with a put promote, you retain the premium so long as Netflix inventory closes above $350 when July choices expire. On the draw back, if NFLX trades beneath $350 prior to expiration, you might be assigned 100 shares for every put bought at a price of $350 per share.

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