top of page
TT Static Logo_edited.png

EARNINGS $POTLIGHT

Netflix Earnings

Apr 15, 2025

Analysts overwhelmingly recommend Netflix (NFLX) as a "buy" ahead of its Q1 2025 earnings report citing its resilience in a volatile economic climate marked by tariff wars and recession fears. 


They highlight Netflix's strong subscription model, burgeoning advertising business, and global growth potential as key drivers. Despite the company ceasing to report subscriber numbers, analysts are optimistic about its continued growth, pricing power, and content strategy, including original series and live sports. 


The consensus is that Netflix is well-positioned to weather macroeconomic headwinds and achieve significant revenue and profit growth, with price targets indicating substantial upside potential.


Netflix (NFLX) is poised to release its Q1 2025 earnings, and analyst sentiment is decidedly bullish. Amid global economic uncertainties, including potential tariff wars and recessionary pressures, several prominent financial firms have identified Netflix as a defensive and growth-oriented investment.


Morgan Stanley, Guggenheim, TD Cowen, Bank of America, and Wedbush Securities have all issued positive reports, with "buy" or "outperform" ratings and price targets ranging from $1,100 to $1,175. These analysts emphasize Netflix's robust subscription model, its ability to generate consistent revenue, and its expanding advertising tier as critical factors for its resilience.


Key points from their reports include:

  • Defensive Position: Netflix is seen as a "most defensive" stock capable of withstanding macroeconomic volatility due to its strong subscriber base and essential entertainment offerings.

  • Advertising Growth: The company's advertising business is expected to be a significant revenue driver with projections of substantial growth in the coming years. Netflix's move to develop its own ad technology is seen as a strategic advantage.

  • Global Expansion: Netflix's focus on international markets particularly in India and Brazil is expected to fuel subscriber growth.

  • Content Strategy: The company's diverse content library, including original series and live sports is driving engagement and subscriber retention.

  • Financial Strength: Analysts anticipate strong revenue and profit growth, driven by subscription increases, pricing power and advertising revenue.

  • Subscriber trends: Even though subscriber numbers wont be released, analysts will be watching for qualitative color on subscriber trends and the growth of the ad based subscription tier.

Analysts are optimistic about Netflix's long-term growth prospects, with some predicting the company could reach a $1 trillion market capitalization. The consensus "Moderate Buy" rating and average price target of approximately $1,103 reflect this positive outlook


Sources: Zacks, Trading View, Investipedia, Hollywood Reporter, Global Mail, Wikipedia

    • Name: Micron Technologies

    • Ticker: MU

    • Earnings: March 20th AMC

    • Consensus EPS: $1.28​

    • Ticker: NLFX

    • Earnings: April 17th AMC

    • Consensus EPS: $5.74

  • Humble Beginnings:

    ​

    • Micron was founded in Boise, Idaho, in 1978, initially as a semiconductor design consulting company.   

    ​

    • Early funding came from local Idaho businessmen, and notably, from J.R. Simplot, the "potato king," whose company supplied potatoes to McDonald's. This connection led to McDonald's also investing in Micron.   

    ​

    • They began their operations from the basement of a dentists office.   
       

    From Consulting to Manufacturing: 

    • They shifted from consulting to manufacturing, producing 64K DRAM chips in 1981.   

    ​

    Pioneering Technology:

    • Micron has been at the forefront of memory technology, contributing to advancements like atomic layer deposition high-k films for DRAM.    

    ​

    Broad Impact:

    • Micron's memory and storage solutions are essential components in a wide range of devices, from personal computers and smartphones to data centers and automotive systems.  

    • Started as a DVD Rental Service: Netflix was founded in 1997 by Reed Hastings and Marc Randolph as a DVD rental-by-mail service. It wasn't until 2007 that they introduced streaming, forever changing the entertainment landscape.

    • The Birth of Binge-Watching: Netflix is often credited with popularizing the "binge-watching" culture. When they started releasing entire seasons of shows at once (beginning with House of Cards in 2013), viewers could watch multiple episodes in one sitting.

    • First Original Show: Netflix’s first original series was House of Cards (2013). It marked a major turning point as they began investing heavily in producing original content.

    • The Red Envelope: In its early years, Netflix’s iconic red envelope for DVD rentals became a symbol of convenience and the future of home entertainment. It's now a nostalgic part of Netflix's history.

    • Over 200 Million Subscribers: As of 2025, Netflix has over 200 million subscribers worldwide, making it one of the largest streaming services globally.

    • Global Expansion: Netflix is available in over 190 countries, making it one of the most widely available entertainment platforms. It adjusts its content to fit the regional tastes of its audience.

    • The “Netflix Effect”: The term "Netflix Effect" refers to how the streaming platform’s original shows and films have reshaped the entertainment industry, particularly in how viewers consume content and how traditional studios create content.

    • Winning Big at the Oscars: Netflix has become a major player in the film industry, with movies like Roma (2018) earning multiple Academy Award nominations and wins. It was the first streaming service to receive a Best Picture nomination.

    • Crazy Popularity in Social Media: Shows like Bridgerton and Squid Game have sparked huge trends on social media platforms, proving Netflix's power not just in content creation but in cultural influence.

    • Massive Investment in International Content: Netflix invests heavily in international content, with hits like Money Heist (La Casa de Papel) from Spain, Sacred Games from India, and Dark from Germany, broadening its appeal globally.

PRE-EARNINGS CONTEXT

Netflix kicked off 2025 with a strong performance, as detailed in their Q1 shareholder letter. The streaming giant reported a 13% year-over-year revenue increase and a 27% rise in operating income, surpassing guidance thanks to higher subscription and ad revenues alongside strategic expense timing. With a robust content lineup, the successful U.S. debut of their ad tech platform, and expanded live programming—including WWE RAW and upcoming boxing and NFL events—Netflix emphasized solid progress on its key priorities for the year. These results underscore the company’s confident outlook as it maintains its 2025 revenue guidance of $43.5–$44.5 billion and a 29% operating margin.

POST EARNINGS TAKES

bottom of page