Proactive Investors - Netflix Inc (NASDAQ:NFLX, ETR:NFC) is set to benefit from strong subscriber growth and promising advertising prospects in its second quarter earnings report, analysts at Bank of America (NYSE:BAC) anticipate.
The bank forecasts 4.6 million net subscriber additions and $9.49 billion in revenue for Q2 2024, driven by healthy subscriber acquisition trends and Netflix’s strong market position.
Netflix’s ad-supported tier has grown to 40 million monthly active users, up from 23 million in January.
While significant advertising revenue is expected by 2025, Bank of America is optimistic about Netflix's long-term potential, projecting continued revenue growth, margin expansion, and free cash flow increases.
Bank of America analysts have raised their price objective on Netflix stock to $740.
Jay Woods, chief global strategist at Freedom Capital Markets (NASDAQ:FRHC), highlighted Netflix's typical volatility around earnings, noting an average post-results move of +/- 9.5%.
Netflix shares have surged 33% year-to-date, nearing all-time highs, and could surpass these with a strong quarter, Woods noted.
“Technically, we look at this through a longer term lens and point out key support and resistance areas that come into play. Shares closed out the week right at the rising 50-day moving average and could pivot higher going into Thursday afternoon’s earnings.”
Technically, the stock is at a pivotal point, according to Woods. Key support is at the 200-day moving average, around $542, indicating potential for a 16% correction. Woods advises caution, suggesting investors wait for post-earnings reaction before making moves, as the stock's current price offers no clear technical advantage.
“The moves tend to be decisive after results and the stock is in a ‘coin flip’ zone for now,” Woods wrote.
Netflix shares traded hands at about $649 late morning on Thursday, marking an almost 40% gain in the year to date.
- Updated with share price movement -