What's Going On With Netflix Stock?

Netflix Inc NFLX shares are trading higher by 9% to $765.66 over the past week. The stock hit a new 52-week high after last week reporting better-than-expected third-quarter financial results and 14.4% growth in global streaming paid memberships.

Additionally, according to an earlier WSJ report, Netflix has closed its Southern California game studio, Team Blue, just under a year after its establishment, signaling a major change in the company’s gaming strategy following the exit of key executives.

What Happened With Earnings: Netflix saw its stock soar to new all-time highs last week following the release of its impressive third-quarter financial results after market close on Thursday.

The streaming giant reported revenue of $9.825 billion, reflecting a 15% year-over-year increase and surpassing analysts' expectations of $9.769 billion. Additionally, the company achieved EPS of $5.40, beating the consensus estimate of $5.12.

As of the end of September, Netflix boasted 282.72 million global paid subscribers, up 14.4% from the previous year. The addition of 5.07 million new subscribers during the quarter, while lower than last year's 8.8 million, still underscores the company’s ongoing appeal in a competitive market. Subscriber engagement also remained strong, with members averaging approximately two hours of viewing per day.

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Notably, Netflix’s ad-supported subscription model showed promise, with membership increasing by 35% quarter-over-quarter and accounting for over 50% of new sign-ups. The company plans to enhance its ad-tech offerings, aiming for a broader rollout in 2025.

What Else: Looking ahead, Netflix projected fourth-quarter revenue of $10.128 billion, a 14.7% increase year-over-year, and an EPS of $4.23, compared to $2.11 in the same period last year.

With a slate of exciting content lined up—including the boxing match between Jake Paul and Mike Tyson and a new season of “Squid Game”—the company anticipates a boost in subscriber growth and engagement during the critical holiday season.

The company also provided a bullish long-term outlook, forecasting revenue between $43 billion and $44 billion by 2025.

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Is NFLX A Good Stock To Buy?

An investor can make a few decisions when deciding whether a stock is a good buy. In addition to valuation metrics and price action which you can find on Benzinga's quote pages – like Netflix‘s page for example – there are factors like whether or not a company pays a dividend or buys a large portion of its stock each quarter.

These are known as capital allocation programs. Netflix does not pay a dividend, but obviously has a few ways it can return value to shareholders. Feel free to search Benzinga's dividend calendar for the next company that is due to pay a dividend and determine what kind of yield you can earn for holding a share of the company.

For example, if you're looking to earn an annualized return of 11.25%, you'll need to buy a share of First Trust Senior by the Nov. 1, 2024. Once done, you can expect to receive a nominal payout of $0.1 on Nov. 15, 2024.

Buyback programs are obviously different and highly variable. A company can approve a buyback program and purchase shares as it sees fit over the course of time in which the buyback was authorized. Looking through the latest news on Netflix will often yield whether or not the company has approved a buyback program recently. Buyback programs usually serve as a support for share prices, serving as a backstop for demand.

According to data from Benzinga Pro, NFLX has a 52-week high of $773.00 and a 52-week low of $395.62.