Internet television network Netflix (NFLX) will report its third-quarter results late Tuesday and Wall Street is on edge. Netflix stock has been sinking ahead of the news.
Netflix shares have fallen for five straight trading sessions. On Wednesday, Netflix stock dropped below its 50-day moving average line, a key support level, according to IBD MarketSurge charts.
On the stock market today, Netflix stock fell 1.6% to close at 1,183.59.
Analysts polled by FactSet expect the streaming video leader to earn $6.96 a share on sales of $11.51 billion in the September quarter. That would translate to year-over-year growth of 29% in earnings and 17% in sales.
For the current quarter, Wall Street is modeling Netflix earnings of $5.43 a share, up 27%, on sales of $11.89 billion, up 16%.
A key focus area for the Q3 report will be Netflix’s progress in scaling its advertising-supported service.
Bernstein analyst Laurent Yoon on Thursday reiterated his outperform rating on Netflix stock with a price target of 1,390.
In a report, he said he expects healthy subscriber engagement trends for Netflix in the third quarter. Popular content last quarter included the second season of “Wednesday,” the third season of “Squid Game” and movie “KPop Demon Hunters.”
Why Analyst Is Neutral On Netflix Stock
The fourth quarter will see the return of Netflix’s monster series “Stranger Things” as well as high-profile movies such as “Frankenstein,” “A House of Dynamite” and “Wake Up Dead Man: A Knives Out Mystery.” It also boasts the return of popular series “The Diplomat” and “The Witcher.”
UBS analyst John Hodulik on Wednesday maintained his buy rating on Netflix stock with a price target of 1,495.
Netflix should be able to sustain double-digit revenue growth for the foreseeable future thanks to member growth, price hikes and increased advertising, Hodulik said in a client note.
Meanwhile, Monness Crespi Hardt analyst Brian White on Thursday kept his neutral rating on Netflix stock.
“Netflix has built a formidable entertainment platform and is developing a promising digital ad franchise; however, competition is dynamic, valuation is rich, and the macro treacherous,” White said in a report.
Follow Patrick Seitz on X at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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