NFLX - Netflix: Streaming Giant Fails To Meet Lofty Investor Expectations

2024-04-22 08:00:00 ET

Summary

• Netflix reported strong Q1 earnings, beating revenue and EPS estimates, driven by higher-than-expected subscriber growth.
• The company's operating income increased by 54% y/y, and free cash flow rose slightly to $2.14 billion in Q1.
• Netflix's stock declined by approximately 9% post-earnings due to concerns about future revenue growth and the company's decision to stop disclosing quarterly membership figures.
• Trading at a rich premium, Netflix's long-term risk/reward is unattractive. NFLX stock looks like dead money for the next 3-5 years.

Brief Review Of Netflix's Q1'24 Earnings Report

On April 18, Netflix ( NFLX ) released its Q1 2024 earnings report, wherein the streaming pioneer delivered a solid double beat [Q1 revenue: $8.83B (+14.8% y/y) vs. est. $8.71B; Q1 EPS: $5.28 vs. est. 4.54] driven by stronger-than-expected paid subscriber growth [9.3M (up from 1.8M in Q1'23) vs. est. 4.8M]....

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