Netflix reports after the bell Thursday, ushering in the start of earnings season for Wall Street’s biggest media and technology giants. Analysts expect the streaming behemoth to post earnings of $4.74 per share on about $9.53 billion in revenue, according to analysts polled by LSEG. Last quarter , the company earned $5.28 per share on $9.37 billion in revenue, and saw a 16% increase in total memberships. Many analysts expect another strong print from Netflix as the company clamps down on password sharing, ramps up its advertising tier and rolls out a strong content slate. Several major firms even lifted their price targets ahead of the report. “Looking forward, the mixture of subscriber tailwinds, the potential for more widely global pricing moves and a robust content slate (especially [returning] titles into 2025) leaves NFLX positively positioned for operating momentum in the coming quarters,” wrote Goldman Sachs’ Eric Sheridan, who has a neutral rating. The analyst regards upside to subscriber additions, commentary surrounding margin expansion and a reacceleration in revenue as key for investors. Morgan Stanley’s Benjamin Swinburne increased his price target to $780 from $700 ahead of the results, saying that advertising should support strong top-line numbers and margin expansion. He views the company as being in a “league of its own,” with a path ahead for a $950 “bull case” price target next year. The adjustment reflects 20% potential upside from Wednesday’s close. “For NFLX shares, much is priced in but we remain bullish given the still large opportunity for growth ahead,” he wrote. “We are admittedly paying in NFLX multiple for the track record this management team has built over two decades navigating disruption and exploiting opportunities advertising will increase in import to deliver on top-line and margin expansion expectations.” Even more critical for investors and Wall Street may be the company’s subscriber numbers as it races to attract eyeballs in a competitive streaming environment. The company previously said that it expects new subscriber numbers to come in below last quarter’s 9.3 million due to seasonality and will stop disclosing quarterly additions in 2025. Jefferies analyst James Heaney expects these programs and a strong content slate position Netflix well for a second-quarter subscriber beat. He lifted his estimate for the quarter to 5.8 million net additions from 4.9 million. Elsewhere, JPMorgan’s Doug Anmuth boosted his forecast to 6 million net additions in the quarter, from 5 million, and anticipates 30 million net additions for the calendar year. The analyst holds an overweight rating and raised his price target to $750 from $650 earlier this month. On the paid-sharing front, Morgan Stanley’s Swinburne estimated that Netflix will convert 30% to 40% of the 100 million households that shared passwords in 2022 to subscribers by year-end. “This suggests there is still runway to bring on new members that in theory should be easier to bring onto the service than those households that have never used Netflix before,” he said. “Our 2025 forecast for 20-21mm paid net adds reflects a view that paid sharing benefits fade more materially next year.” Netflix has made strides within advertising, disclosing in May that there were 40 million active monthly users in the tier. But some analysts view the story as early-stage, with Evercore ISI’s Mark Mahaney noting that ad demand needs to “fully catch up to subscriptions.” NFLX YTD mountain Netflix shares since the start of the year Bank of America doesn’t “expect a material revenue contribution until 2025—especially given the glut of new inventory coming to market (given the launch of several competitor ad-supported services in recent months) alongside the backdrop of a mixed advertising environment,” wrote analyst Jessica Ehrlich. To be sure, some analysts are warning investors to tread carefully heading into earnings. That includes Citi’s Jason Bazinet and Piper Sandler’s Matt Farrell. Both firms retained their neutral ratings as the stock has risen 34% year to date. “We continue our neutral stance on the stock, as we think the risk/reward profile is balanced heading into print,” Farrell wrote. “However, we believe Netflix has proven itself to be the leader in streaming.”
