Netflix stock price: what to expect from Q2 results

What is the Netflix earnings date?

On Tuesday, July 19, after the market closes, traders and investors can get their hands on the streaming giant’s second-quarter results.

Netflix share price forecast based on Q2 results

Given that this is the first of the FAANGs (Facebook, Apple, Amazon, Netflix and Google) to release their numbers, this is generally a closely watched event with implications not only for other streamers who found themselves caught in its downward spiral after its first-quarter earnings release, but for other growth and tech-related companies.

Few can forget the readings of the last quarter when Netflix suffered a shock loss in subscribers for the first time in over a decade. Subscription levels are down 200,000 meaning Netflix has missed out on revenue as it topped revenue last time around, and unlike Disney and some of the other streamers who have a more diverse product offering. , it all usually depends on Netflix subscribers.

The second quarter is expected to see a further loss of subscribers of up to 2 million, despite new seasons of popular titles which tend to attract both new and returning users to its platform. Analyst forecasts are for earnings per share (EPS) of $2.96 for the first quarter, which is lower than what we saw for the same quarter last year. That estimate has changed little in the past two months and when it comes to revenue, Netflix is ​​hoping for more than $8 billion.

The numbers will factor in for a new P/E (price/earnings) reading, but based on the current numbers, Netflix has put its valuation at much better levels than its historical average. Due to falling prices, strategic considerations will carry a lot of weight as investors and traders digest where they can extract more growth and revenue.

That includes how Netflix can tap into “well over half of the world’s broadband homes” that haven’t yet paid for it and there’s also the potential gaming updates given how long the Gen Z and Gen Y on other things like user-created videos, games, and music. That’s because more and more parts of the world (aside from China) have embraced ‘living with the virus’ as opposed to lockdowns that have forced them to spend more time glued to a screen.

That, combined with intense competition at a time when households around the world are suffering from rising costs, has meant that multiple streaming sources in a single home have gone from the norm during the pandemic to more of an exception. Any updates to its pricing model (especially since it remains the most expensive option), the extent to which it will include an ad version, how they will do account sharing to increase users, as well as any possible synergy following last month’s reports of a potential takeover or merger ideally aimed at reducing costs will no doubt be noted.

Netflix should be more measured in terms of continued growth of what is the latest theme, even if it is not a small streamer limited to a small war chest, because any gain in subscribers to these levels could be more artificial than natural depending on how they change their pattern. Netflix cited “slow economic growth, rising inflation, geopolitical events” last time, and it’s fair to say all three are worse off today compared to a few months ago. .

Overall, this is a majority buy rating with little chutzpah going into the ‘underperform’ and ‘sell’ categories, with a decent amount for ‘strong buy’. It gets interesting with the price target, because although the average of them fell over $500 in April when prices were around $350, the target has since fallen to under $300, and once again is still well above the current market price below $180.

Netflix Second Quarter Results: Weekly Technical Overview and Trading Strategies

While profits are about the fundamental aspect of the business, a look at the technical aspects and its difficulty in extracting anything other than negatives, especially when considered in the longer term. Prices are below all of its major long-term weekly moving averages, with the RSI (Relative Strength Index) still in oversold territory. DMI (Directional Movement Index) shows a pretty decent margin of DI- over DI+, and ADX (Average Directional Movement Index) well in trend territory.

Oscillations since May have meant that a zoom to the daily timeframe paints a more consolidated picture, with price roughly in the middle of the band, short-term moving averages close together and price, an ADX reading out of trend territory, and an unclear margin for the DI- over the DI+ generally classifying its DMI as neutral.

Overall, as far as the weekly time frame is concerned, and the technical overview is a downtrend in terms of the rankings, the ‘stall’ is due to swings over the last ten weeks or so that haven’t really offered game for both conformist and contrarian strategies.

That could change when it’s doused with a major fundamental event like next Tuesday’s, especially as traders, market makers and investors remember the double-digit percentage declines in January and April and consider a move well beyond the levels formulated on more recent prices. action, making it more breakout compared to reversal.