Can Netflix Deliver in Q4?

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Netflix Inc. (NASDAQ: NFLX) is scheduled to release its most recent quarterly results after the markets close on Thursday. The consensus estimates from Thomson Reuters call for $0.24 in earnings per share (EPS) and $4.21 billion in revenue. In the same period of last year, it posted EPS of $0.41 on $3.29 billion in revenue.

Netflix has been a market darling for years, and it still rose by 39% in 2018, even considering how much the market sold off. Netflix also saw its shares pull back, closing out 2018 at $267.66. But now shares have traded back up over $350. That’s a gain of more than 30% after a little more than two weeks of trading in the new year.

What was amazing about Netflix at the end of 2018 was that the consensus analyst price target from Thomson Reuters of $389.85 implied upside of 45.6% for 2019. This seemed ludicrous, considering the market volatility at the end of 2018 and considering how much the shares had pulled back based on many valuation and financial concerns around the stock. Zoom forward about two weeks and suddenly the shares are up more than 30%, and another 15% is never considered to be an impossible feat on Wall Street.

There is something happening though that investors should consider. Netflix’s consensus analyst target price has actually drifted lower in 2019 while the shares have screamed higher. There is a chance that the upside is still incredibly high for investors who are seeking growth wherever they can find it.

24/7 Wall St. has tracked multiple analyst calls, and the expectation sure looks to be that Netflix is being set up to be the king of earnings season for January. That is at least what a short gain of this sort suggests. That said, if Netflix has poor guidance or very disappointing metrics, then there will be hell to pay in its share price.

Even ahead of earnings, Netflix is raising its prices as well.

Excluding Wednesday’s move, Netflix had vastly outperformed the broad markets, with its shares up about 32.5% in 2019 alone. In the past 52 weeks, the stock is up just over 60%.

Shares of Netflix were last seen trading at $350.83, in a 52-week range of $216.32 to $423.21. The consensus analyst price target is $381.07.

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