:max_bytes(150000):strip_icc()/GettyImages-2252283918-40d612cae6ab4c3ea20a8796e8bb3867.jpg "Here’s How Much Traders Expect Netflix Stock to Move After Earnings Tuesday")
:max_bytes(150000):strip_icc():format(jpeg)/GettyImages-2252283918-40d612cae6ab4c3ea20a8796e8bb3867.jpg)
Key Takeaways
- Netflix is due to report earnings after the market closes Tuesday, with options pricing suggesting traders expect the stock could move up to 7% by the end of the week.
- Investors could focus more on what executives have to say about Netflix’s pending acquisition of Warner Bros. Discovery than the fundamentals of its business.
Netflix is set to report fourth-quarter earnings after the market closes Tuesday, with traders anticipating a big swing in the streaming giant’s stock following the results.
Options pricing suggests traders expect Netflix (NFLX) stock could move up to 7% in either direction by the end of the week. At the high end, a move of that size from Friday’s level at $88 would push the stock up to around $94, recovering some of its recent losses. At the low end, shares could slip below $82, their lowest level in over a year.
Netflix shares are down nearly 30% since the company’s last quarterly report in October, when an earnings miss due to a surprise tax expense sent the shares tumbling 10% the day after the results. The shares have also been pressured over the last month by worries about the streaming giant’s pending acquisition of Warner Bros. Discovery (WBD), which has faced some pushback from politicians and rival bidder Paramount Skydance (PSKY).
Why This Matters to Investors
Netflix executives will likely receive a number of questions about the deal with Warner Bros. Discovery, including how the company plans to pay for the purchase amid reports that it is considering making its offer all-cash rather than a mix of cash and stock.
Netflix is expected to report a nearly 17% jump in revenue to $11.97 billion, while earnings per share are expected to gain nearly 30% year-over-year to $0.55, according to estimates compiled by Visible Alpha.
Goldman Sachs analysts told clients earlier this month that they expect the fourth-quarter report to “reflect a solid end to 2025 as management continues to execute well against its core areas of strategic focus,” such as growing user engagement and scaling live sports and gaming offerings, along with Netflix’s ad business. However, the analysts said investors’ attention could be more focused on questions surrounding the Warner Bros. deal, including regulatory uncertainty, competition from Paramount, and how Netflix’s business will operate until the deal potentially closes.
Ahead of Tuesday’s results, most Wall Street analysts are bullish on Netflix stock. Of the 10 analysts with current ratings tracked by Visible Alpha, eight consider the stock a “buy,” compared to two “hold” ratings. Their average price target of $135 would suggest over 50% upside from its recent level.
