Results: Netflix, Inc. Beat Earnings Expectations And Analysts Now Have New Forecasts

It's been a sad week for Netflix, Inc. (NASDAQ:NFLX), who've watched their investment drop 11% to US$555 in the week since the company reported its first-quarter result. It looks like a credible result overall - although revenues of US$9.4b were in line with what the analysts predicted, Netflix surprised by delivering a statutory profit of US$5.28 per share, a notable 17% above expectations. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Netflix

Taking into account the latest results, the consensus forecast from Netflix's 45 analysts is for revenues of US$38.6b in 2024. This reflects a solid 10% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to leap 21% to US$18.07. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$38.6b and earnings per share (EPS) of US$17.11 in 2024. So the consensus seems to have become somewhat more optimistic on Netflix's earnings potential following these results.

There's been no major changes to the consensus price target of US$634, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Netflix, with the most bullish analyst valuing it at US$765 and the most bearish at US$440 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 14% growth on an annualised basis. That is in line with its 13% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 8.2% per year. So it's pretty clear that Netflix is forecast to grow substantially faster than its industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Netflix's earnings potential next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Netflix. Long-term earnings power is much more important than next year's profits. We have forecasts for Netflix going out to 2026, and you can see them free on our platform here.

You can also view our analysis of Netflix's balance sheet, and whether we think Netflix is carrying too much debt, for free on our platform here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.