Street Calls of the Week
Investing.com - Evercore ISI has reiterated its Outperform rating and $1,375.00 price target on Netflix (NASDAQ:NFLX), currently trading at $1,241.35, following the streaming giant’s mixed third-quarter earnings results. According to InvestingPro data, Netflix maintains a perfect Piotroski Score of 9, indicating exceptional financial strength.
Netflix reported revenue that missed both guidance and Street expectations by 0.1%, marking the company’s first revenue miss in two years. While the miss is notable, the company’s trailing twelve-month revenue stands at $41.69 billion, with a healthy 14.84% growth rate. Evercore noted this represents a departure from Netflix’s recent performance, as the company has averaged a 0.6% beat over the past two years, with the largest beat being 1.4%.
The streaming service’s operating income also fell short of expectations, though Evercore attributed this to a surprise $619 million non-cash expense related to Brazilian regulations. The firm calculated that without this one-time expense, Netflix would have exceeded bottom-line estimates by approximately 6-7%.
Despite the revenue miss during what Evercore described as "a major content quarter" featuring releases like "KPop," "Wednesday," and "Happy Gilmore 2," the firm emphasized that Netflix’s massive subscription model "doesn’t lend itself to major variance either way in any one quarter."
Looking ahead, Evercore highlighted that Netflix’s fourth-quarter revenue guidance came in modestly above Street expectations, while its fourth-quarter operating income guidance aligned with consensus estimates. Based on InvestingPro’s comprehensive analysis, the stock appears slightly overvalued at current levels, though it has delivered an impressive 56.93% return over the past year. Get access to 16 additional exclusive ProTips and detailed valuation metrics with an InvestingPro subscription.
In other recent news, Netflix Inc. announced its third-quarter 2025 earnings, which showed a significant shortfall in earnings per share (EPS) compared to expectations. The company reported an EPS of $5.87, which was notably below the anticipated $6.96, marking a 15.66% negative surprise. However, Netflix’s revenue for the quarter reached $11.51 billion, aligning with analysts’ projections. This revenue consistency came amid positive developments in the company’s advertising sector and the introduction of innovative product launches. Despite the earnings miss, these advancements contributed to a slight increase in Netflix’s stock in aftermarket trading. Additionally, analysts have been closely monitoring Netflix’s performance, reflecting the company’s strategic efforts in diversifying its offerings. These recent developments underscore the dynamic environment in which Netflix operates.
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