Netflix, which monetary analysts have topped the undisputed subscription-streaming chief, kicks off the media and leisure sector’s Q1 earnings this week. Wall Avenue anticipates that Netflix will report sturdy outcomes for the interval — the primary quarter it will no longer disclose subscriber counts — and that the corporate is comparatively nicely positioned to resist financial headwinds.
Netflix is scheduled to report Q1 2025 outcomes Thursday, April 17, after market shut. Wall Avenue consensus estimates are for quarterly income to return in at $10.51 billion (up 12% yr over yr) with earnings per share of $5.66 (up 7%), in keeping with LSEG Knowledge & Analytics. That’s barely above the corporate’s earlier steering for income of $10.42 billion and EPS of $5.58.
“Given macro volatility, we view Netflix as arguably essentially the most defensive inventory in our protection universe amid any broader slowdown,” TD Cowen analysts led by John Blackledge mentioned in an April 8 analysis observe.
For starters, Netflix is not going to face any important direct influence from the Trump administration’s tariffs. The TD Cowen analysts additionally cited “sturdy underlying biz demand from more and more world content material slate,” Netflix’s sturdy worth proposition particularly relative to out-of-home leisure choices, and continued “secular adoption of streaming video.” TD Cowen has a “purchase” score on Netflix with a 12-month worth goal of $1,150/share.
To this point in 2025, Netflix shares have outperformed the broader market: The inventory is up greater than 7% yr so far, in contrast with a decline of greater than 10% for the S&P 500 index amid President Trump’s tariff bulletins and escalating commerce struggle with China.
Seaport Analysis Companions fairness analyst David Joyce equally famous that Netflix is “one of many most cost-effective types of leisure on a per-hour engagement foundation.
“Typically talking, what makes NFLX (and different streamers, after all) a defensive stay-cation different if we enter a recession is that it’s more likely to be one of many final expenditures lower from a shopper’s funds,” Joyce wrote in an April 14 observe. The month-to-month worth of Netflix premium service within the U.S. prices as a lot as “a single Imax ticket in main markets for two hours, or one-fifth of the typical worth of a single Stay Nation ticket for a 2-hour occasion — to not point out evaluating to professional sports activities occasions or theme parks,” he added. Joyce charges Netflix a “purchase” with a $1,025/share 12-month worth goal.
As Netflix introduced final yr, starting with the primary quarter of 2025 it would stop reporting paid subscriber numbers and common income per member (ARM) on an everyday quarterly foundation, saying these aren’t as significant as person engagement or monetary metrics like income and working margin. (Netflix says it “will proceed to announce paid memberships as we cross key milestones.”) For This autumn of 2024, Netflix reported 18.9 million net new global subscribers — round twice analyst expectations — to succeed in 301.6 million at year-end.
With the choice to now not report subscriber figures, “Netflix is now free to focus solely on income development,” Wedbush Securities analyst Alicia Reese wrote in an April 11 observe. The corporate in January applied worth hikes throughout all tiers within the U.S. and different international locations; even when that ends in subscriber cancellations Netflix can “obscure subscriber churn and trade-downs whereas displaying significant income development.”
Within the absence of subscriber figures, TD Cowen’s Blackledge expects buyers to search for updates round Netflix’s “burgeoning advert tier.” Netflix plans to launch first-party promoting tech stack within the U.S. in April after rolling it out in Canada, and “we’ll search for coloration round potential timing of the remaining 10 advert markets later in 2025,” Blackledge wrote.
Netflix earlier this yr raised its 2025 outlook for income to be between $43.5 billion and $44.5 billion (up $500 million from its prior forecast) and for working margin to be 29%, up one share level from its earlier steering. With $18 billion in content material spending forecast for 2025, “there’s significant upside potential to Netflix’s 2025 steering,” Wedbush’s Reese wrote.
For 2025, the corporate has touted the return of three of its greatest TV reveals — “Squid Recreation,” “Wednesday” and “Stranger Issues” — and mentioned it plans to “develop into new areas like dwell programming and video games.” Of observe, Netflix started streaming WWE “Monday Evening Uncooked” completely within the U.S., Canada, the U.Ok. and Latin America on a weekly foundation in January 2025. It additionally will reprise its NFL double-header on Christmas Day 2025.
“Netflix is positioned to speed up ad-tier income contribution for the following a number of years by including extra dwell occasions, enhancing its promoting options and focusing on, and broadening its content material technique,” Reese wrote. The analyst maintains an “outperform” score on Netflix with a $1,150/share 12-month worth goal, reflecting a P/E a number of of 34X on Wedbush’s 2027 EPS estimate.
In the meantime, in keeping with TD Cowen’s month-to-month survey of two,500 U.S. shoppers, Netflix continues to be the most well-liked solution to watch video content material in the lounge. Requested which platform shoppers use most frequently to view video content material on their TV, Netflix retained the highest spot in February 2025 with 25% of respondents, adopted by YouTube (15%) and fundamental cable (10%). “We expect Netflix’s broad catalog throughout a number of genres creates a sturdy benefit over time,” Blackledge wrote.
(Pictured above: Netflix’s hit limited series “Adolescence”)
