Consumer Discretionary

BofA Securities raised the price target on Netflix (NFLX) to $700 from $650 while maintaining its buy rating after the company reported “strong” Q1 results “including net adds” of 9.3 million. By comparison, the brokerage expected a 5.1 million estimate. analyst Jessica Reif Ehrlich wrote. Netflix will no longer disclose paid members , starting Q1 next year, Ehrlich said, citing the entertainment media giant. The brokerage sees the change as “a contributor to the negative after-market stock reaction.” Netflix has an average outperform rating and a price target range of $440 to $765, according to analysts polled by Capital IQ.

Netflix (NFLX) posted strong first-quarter results and has “several” growth drivers ahead, but its decision to stop disclosing two key performance metrics starting next year likely contributed to a share-price selloff, BofA Securities said in a note e-mailed Friday. Late Thursday, the streaming giant reported that its first-quarter revenue rose 15% year-over-year to $9.37 billion, while earnings jumped to $5.28 a share from $2.88, both topping market projections amid stronger-than-expected membership growth. The company projected second-quarter revenue at $9.49 billion, trailing Wall Street’s $9.53 billion views at the time. It expects net subscriber additions to be down sequentially due to seasonality. Netflix said in a letter to shareholders that it will stop reporting quarterly membership numbers and average revenue per membership, or ARM, starting with its 2025 first-quarter results. A lack of visibility into the two indicators likely dragged the stock lower in after-hours trade on Thursday, BofA analyst Jessica

Netflix Guides For Full Year 2024 Revenue Growth of 13%-15%; Operating Margin Seen at 25%.

Netflix (NFLX) reported Q1 earnings Thursday of $5.28 per diluted share, up from $2.88 a year earlier. Analysts polled by Capital IQ expected $4.53. Revenue in the quarter ended March 31 was $9.37 billion, up from $8.16 billion a year earlier. Analysts surveyed by Capital IQ expected $9.28 billion. The company said it expects Q2 diluted EPS of $4.68 on revenue of $9.49 billion. Analysts polled by Capital IQ expect EPS of $4.55 on revenue of $9.53 billion. The company shares were down nearly 3% in recent after-hours activity.

Netflix is hoping customers see its advertising-supported subscription tier as still better than cable. Co-CEO Greg Peters says in a video with 1Q earnings that greater awareness of the quality of the company’s ad experience should help boost subscriptions. He says that the linear TV ad experience is still “quite poor” in many places around the world. He also mentions low price and tools like integrated payments as drivers of growth for the ad tier. Ads membership grew 65% sequentially in 1Q, keeping pace with the quarter-on-quarter changes in the previous two reporting periods. Netflix shares are down 3.9% to $587.22 after-hours.

Netflix showed that its password-sharing crackdown continues to bear fruit, delivering its strongest first-quarter customer additions since the pandemic and further strengthening its position as the dominant global streamer. The company added 9.33 million subscribers in the first quarter, more than five times the number of customers it added during the same period a year earlier, with its efforts to limit password sharing continuing to bear fruit. Netflix began limiting password sharing in earnest about a year ago. Netflix has spent the last year rolling out that initiative, working to expand its ad business and changing its line-up of prices and plans to better position itself for the future. The company plans to stop providing investors quarterly membership numbers and the average revenue generated per member early next year because it now has multiple pricing tiers in a variety of markets. Netflix said it would add annual revenue guidance. Netflix

The following is a summary of the Netflix, Inc. (NFLX) Q1 2024 Earnings Call Transcript: Financial Performance: Netflix expects healthy double-digit revenue growth for the full year, with Q1 indicating a 15% increase. It forecasts its operating profit margin to increase to 25% in 2024, up from 21% last year. The company projects Q2 paid net additions to be lower than Q1. The expansion of its paid sharing and advertising businesses is facilitating multiple revenue streams. Its ad offering has grown by about 65%, quarter-to-quarter, in the last three consecutive quarters. Business Progress: Netflix is diversifying its revenue model, focusing on advertising and additional member features. The operationalization of pay sharing work has contributed to revenue conversion. Netflix plans to further expand into advertising, aiming to increase its base of paid members and audience for advertisers. The company aims to boost engagement by continuously improving its services and concentrating on