Shares of streaming giant Netflix (NFLX) fell in after-hours trading after the company reported earnings for its second quarter of Fiscal Year 2024. Earnings per share came in at $4.88, which beat analysts’ consensus estimate of $4.74 per share. Sales increased by 16.7% year-over-year, with revenue hitting $9.56 billion. This beat analysts’ expectations of $9.53 billion. In addition, global streaming paid memberships increased to 277.65 million users, which equates to an 8.05 million user jump in the second quarter. Meanwhile, analysts had forecast 274.4 million users.
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Interestingly, investors could have anticipated the solid year-over-year growth by simply looking at Netflix’s website traffic. As the image below shows, the number of visitors rose significantly during the most recent quarter. In fact, total estimated visits jumped 103.13% when compared to the same quarter of last year.
Looking forward, management now expects revenue and adjusted earnings per share for Q3 2024 to be $9.73 billion and $5.10, respectively. For reference, analysts were expecting $9.81 billion in revenue, along with an adjusted EPS of $4.74. The miss in revenue guidance is likely what attributed to the stock’s pullback in the after-hours.
Is NFLX Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on NFLX stock based on 23 Buys, 12 Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 34% rally in its share price over the past year, the average NFLX price target of $673.89 per share implies 4.72% upside potential. However, it’s worth noting that estimates will likely change following today’s earnings report.
