TLDR
- Netflix reports Q2 earnings on July 16, with Wall Street expecting EPS of $0.79 on revenue of $12.58 billion
- NFLX stock is down 44% from its all-time high, trading at $73.37, while the S&P 500 gained 22% in the same period
- JPMorgan maintained an Overweight rating with a $118 price target, citing pricing, advertising, and subscriber growth as key drivers
- Q2 revenue growth is forecast at 13.5%, down from 15.9% a year ago
- Insiders sold $80.1 million worth of stock in the last three months
Netflix heads into its Q2 earnings report on July 16 with its stock under pressure. NFLX is currently trading at $73.37, down 44% from its all-time high, even as the broader S&P 500 gained 22% over the same stretch.
The stock’s slide started after Netflix floated plans to acquire Warner Bros. Discovery’s streaming operations — a deal it later walked away from. That spooked investors, and the mood hasn’t fully recovered.
Wall Street is expecting earnings per share of $0.79 on revenue of about $12.58 billion for the second quarter.
Q1 came in better than expected, with revenue up 16.2%. But the Q2 revenue growth forecast of 13.5% — down from 15.9% a year ago — has investors wondering if the easy growth days are behind it.
JPMorgan Stays Bullish
JPMorgan analyst Doug Anmuth kept his Overweight rating and $118 price target ahead of the print. He acknowledged that “investor sentiment remains cautious,” but said the long-term picture still holds up.
Anmuth pointed out that Netflix has only reached less than 45% of connected TV households outside China and Russia. There’s still room to grow.
He also noted that engagement time rose roughly 2% in Q1, and the company’s internal quality engagement metric hit an all-time high. Numbers the headline figures don’t always capture.
JPMorgan expects Netflix to hold its full-year revenue guidance of $50.7 billion to $51.7 billion and maintain its operating margin guidance of 31.5%.
Ad Revenue and Pricing in Focus
The ad business is becoming a bigger part of the story. JPMorgan estimates ad revenue could roughly double to around $3 billion in 2026.
Recent U.S. price increases could tack on more than $1.7 billion in additional annual revenue, according to Anmuth’s estimates.
Netflix introduced ad-supported plans back in 2022, and that bet is starting to show up in the numbers.
On the valuation side, GuruFocus puts Netflix’s GF Value at $99.05, suggesting the stock is about 25.9% undervalued at current prices. Its P/E ratio sits at 23.7x, well below its five-year median of 42.92x.
The GF Score comes in at 95 out of 100, with perfect 10/10 scores for profitability and growth. Momentum is the weak spot, scoring just 4/10.
One flag worth watching: insiders have sold $80.1 million worth of stock over the last three months.
Across Wall Street, the consensus is a Strong Buy — 24 Buys and 8 Holds. The average price target of $113.68 implies around 54.9% upside from current levels.
Netflix reports on July 16.
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