How To Trade Netflix After Q4 2023 Performance
The end-of-year holiday period is a key time for most retailers but also streaming companies. Subscription gift cards and presents can often lead to a higher number of subscribers - a key metric tech investors follow.
Learn more about Netflix's fiscal fourth-quarter performance and what the analysts are forecasting for the stock.
|Symbol for Invest.MT5 Account:
|Date of Idea:
|31 January 2024
|1 - 6 months
|Position Size for Invest.MT5 Account:
- The Invest.MT5 account allows you to buy real stocks and shares from 15 of the largest stock exchanges in the world.
All trading is high risk and you can lose more than you risk on a trade. Never invest more than you can afford to lose, as some trades will lose and some trades will win. Start small to understand your own risk tolerance levels or practice on a demo account first to build your knowledge before investing.
Netflix Q4 2023 Performance
Here are some of the key highlights from the latest fourth-quarter earnings report from Netflix:
- Earnings per share of $2.11 vs $2.22 expected
- Revenue of $8.83 billion vs $8.72 billion expected
- 13.1 million new subscribers added
- Net income of $937.8 million vs $55.3 million in the prior year
- Q1 2024 earnings per share forecast of $4.49, higher than $4.10 expected
Netflix beat analyst forecasts on most metrics. The growth in subscribers was much higher than Wall Street expected - even as the streaming giant cracks down on password sharing. There are now 260.8 million paid subscribers which is a new record for Netflix.
Other streaming rivals have struggled recently, cutting down on content and growing through mergers and acquisitions of entertainment assets. Netflix has stated they are not going down that traditional route and are instead working on partnerships with content creators. For example, it will start streaming WWE Raw next year - a huge step into live entertainment.
The company also launched its ad-tier service. There are now 23 million global monthly active users, compared to 15 million in November. Still, Netflix does not see this as a primary revenue driver for 2024.
However, investors need to be mindful that the surge higher in its stock price after the earnings announcement means that much of the good news may already be priced in. The real test is if Netflix can hold on to its subscribers outside of the holiday season where it tends to have a boost.
The more than 250% rally in Netflix's share price since the lows of May 2022, has some analysts weary. This can be seen in more analysts providing a hold rating on the stock and one even providing a sell rating on the stock, as detailed below.
Netflix Stock Forecast - What do the Analysts Say?
According to analysts polled by TipRanks for a Netflix stock forecast in the past 3 months, there are currently 27 buy, 12 hold and 1 sell ratings on the stock. The highest price level for a Netflix stock forecast is $700.00 with the lowest price target at $375.00.
The average price target for a Netflix stock forecast is $573.32.
An Example Trading Idea for the Netflix Stock Price
An example trading idea for the Netflix share price could be as follows:
- Buy the stock on a break above the post-earnings high at $563.00 to allow for volatility.
- Target just below the highest analyst price target of $700.00.
- Keep your risk small at a maximum of 5% of your total account.
- Time Line = 1 – 6 months
- If you buy 10 Netflix shares:
- If target is reached = $1,370.00 potential profit [($700.00 - $563.00) * 10 shares].
Remember that markets go up and down and it is unlikely the share price will move up in a straight line. In fact, it may even go much further down before it rises, especially considering how far the stock has already risen and the seasonal boost it received in the last quarter may not continue in the next quarter.
Be sure to exercise good risk management and always know how much you could potentially lose on a trade and the risks involved, as well as the costs.
With the Admirals Invest.MT5 account you can buy and sell US stocks with a commission from $0.02 per share. This means buying 10 shares in Netflix stock would result in a commission of $0.20 ($0.02 * 10 shares) for executing a per-side transaction.
There is a low minimum transaction fee of $1. So, the example trading idea above would result in a commission of just $1 overall!
How to Buy Netflix Stock in 4 Steps
With Admirals, you can buy shares in companies like Netflix with a low commission of just $0.02 per share and a low minimum commission of just $1 on US stocks.
- Open an account with Admirals to access the dashboard.
- Click on Trade on one of your live or demo accounts to open the web platform.
- Search for your stock in the search window at the top right to view the live price chart.
- Click Create New Order from the bottom of the screen to open the trading ticket.
Click on the banner below to trade Netflix stock today ▼▼▼
Do You See the Netflix Stock Price Moving Differently?
Remember that all analytics and trading ideas are based on the personal view and experience of the author.
If you believe there is a higher chance Netflix share price will move lower, then you can also trade short from a CFD (Contracts for Difference) trading account which Admirals also provide.
This means you can trade long and short to potentially profit from rising and falling stock prices.
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