Netflix Earnings Preview: Retail Optimism Abounds As Over 70% Of Stocktwits Users Brace For Q4 Beat From Streaming Giant

Streaming giant Netflix, Inc. (NFLX) is scheduled to report its fiscal year 2024 fourth-quarter results after the market closes on Tuesday and retail investors are optimistic about the quarterly performance.

Netflix stock climbed 1.57% to $871.60 ahead of the report. After an 83% jump in 2024, the stock has lost about 3.72% since the start of the new year. It currently trades off its record high of $941.75 reached on Dec. 11.

Q4 Expectations

Netflix is widely expected to report strong earnings per share (EPS) and revenue growth for the fourth quarter. Analysts, on average, estimate EPS of $4.21, up from $2.11 a year ago, and revenue of $10.11 billion. The Street's topline estimate suggests year-over-year (YoY) growth of about 14.50%.

The company’s guidance issued in mid-October calls for 15% revenue growth and an increase in paid net additions from 5.07 million in the third quarter.

In a recent report, Citigroup said it expects Netflix's net subscriber additions to beat sell-side estimates.

Morgan Stanley analyst Benjamin Swinburne cautioned that a stronger dollar could put downward pressure on reported revenue and margins. The dollar index, which measures the value of the U.S. dollar relative to a basket of six major foreign currencies, climbed 7.2% in the fourth quarter.

A Stocktwits poll among users of its platform showed that 71% of the respondents expected a beat.

Forward Outlook

Netflix expects to report 2025 revenue of $43 billion to $44 billion, helped by membership growth and average revenue per member (ARM). The company said in April last year that it will cease to report membership numbers and ARM beginning in 2025.

Citi expects investors to focus on potential price hikes, sports strategy, and ad tier. 

Fund Manager Louis Navellier said Netflix’s earnings will offer insights into the health of subscription-based streaming services. According to the fund manager, forward guidance is crucial. 

According to Loop Capital analysts, the sports foray has come much quicker than anticipated. They expect the company to be awarded a National Football League (NFL) weekly package deal within the next five years.

Retail Mood

On Stocktwits, retail sentiment toward Netflix stock improved to ‘bullish’ (71/100) from ‘neutral’ a day ago. Retail chatter improved ahead of the earnings report, with message volume improving to ‘high’ levels.

NFLX sentiment and message volume January 21, 2025, as of 1:51 pm ET | Source: Stocktwits

A retail watcher explained the rationale behind the optimism, saying Netflix is becoming the new cable company for the entire world. Some said the stock could eye the $1,000 psychological resistance after the results.

Another said the company’s earnings could set the tempo for the year’s market direction.

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