Netflix Inc NFLX shares are trading higher Wednesday on the heels of the company’s fourth-quarter financial results. Here’s a look at what you need to know.
Q4 Earnings: Netflix said fourth-quarter revenue increased 12.5% year-over-year to $8.83 billion, which came in ahead of the consensus estimate of $8.72 billion, according to Benzinga Pro.
The streaming giant reported fourth-quarter earnings of $2.11 per share, which missed estimates of $2.21 per share.
Netflix said it had 13.12 million paid net adds in the fourth quarter, up from 7.7 million in the prior year’s quarter. The company ended the quarter with 260.28 million global subscribers, up 12.8% year-over-year.
“If we continue to execute well and drive continuous improvement — with a better slate, easier discovery and more fandom — while establishing ourselves in new areas like advertising and games, we believe we have a lot more room to grow,” the company said in a letter to shareholders.
Outlook: Netflix said it will continue to build out its ad-supported tier as it aims to makes ads a more substantial revenue stream in the coming years.
The company guided for first-quarter revenue of $9.24 billion versus estimates of $9.3 billion. Netflix expects first-quarter earnings of $4.49 per share, versus estimates of $4.10 per share. The company also raised full-year 2024 operating margin expectations from a range of 22% to 23% to 24%.
Netflix also guided for paid net additions to be down sequentially in the first quarter, but said it expects paid net adds to be up versus the 1.8 million in the first quarter of 2023.
Analyst Changes: Following the print, Keybanc maintained Netflix with an Overweight and raised the price target from $545 to $580. Wedbush also maintained Netflix with an Outperform and raised the price target from $525 to $615, while Deutsche Bank downgraded Netflix from Buy to Hold, but raised the price target from $460 to $525.
NFLX Price Action: Netflix shares were up 10.8% at $545.48 at the time of publication, according to Benzinga Pro.
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