Should You Buy Netflix ETFs Ahead of Q4 Earnings?
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 20 2025
0mins
Should l Buy NFLX?
Source: NASDAQ.COM
Netflix's Upcoming Earnings Report: Netflix is set to release its fourth-quarter 2024 results on January 21, with expectations of significant earnings growth of 98.6% and revenue growth of 14.5%. Analysts are optimistic about the company's performance, reflected in a strong average brokerage recommendation and a positive earnings surprise history.
ETFs Focused on Netflix: Several ETFs, including MicroSectors FANG+ ETN and First Trust Dow Jones Internet Index Fund, have substantial allocations to Netflix, indicating investor confidence in the streaming giant's future growth despite its high P/E ratio compared to the industry.
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Analyst Views on NFLX
Wall Street analysts forecast NFLX stock price to rise
38 Analyst Rating
27 Buy
10 Hold
1 Sell
Moderate Buy
Current: 91.020
Low
92.00
Averages
114.18
High
150.00
Current: 91.020
Low
92.00
Averages
114.18
High
150.00
About NFLX
Netflix, Inc. is a provider of entertainment services. The Company acquires, licenses and produces content, including original programming. It provides paid memberships in over 190 countries offering television (TV) series, films and games across a variety of genres and languages. It allows members to play, pause and resume watching as much as they want, anytime, anywhere, and can change their plans at any time. The Company offers members the ability to receive streaming content through a host of Internet-connected devices, including TVs, digital video players, TV set-top boxes and mobile devices. It is engaged in scaling its streaming service, such as introducing games and advertising on its service, as well as offering live programming. It is developing technology and utilizing third-party cloud computing, technology and other services. The Company is also engaged in scaling its own studio operations to produce original content.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Acquisition Decision: Netflix prudently walked away from a significant acquisition following a drop in its stock price on the afternoon of May 1, 2026, demonstrating the company's cautious approach to protecting shareholder interests amid market volatility.
- Market Reaction: This decision negatively impacted Netflix's stock price when the video was published on May 3, reflecting investor concerns about the company's future growth potential, which could affect its short-term market performance.
- Strategic Shift: The abandonment of the acquisition indicates that Netflix may be reassessing its expansion strategy, focusing instead on internal content development and user growth to address the intensifying competition in the streaming market.
- Risk Management: By avoiding high-risk acquisitions, Netflix showcases its risk management capabilities in uncertain market conditions, aiming to maintain long-term financial health and market position.
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- Stock Price Decline: Since reporting first-quarter earnings on April 16, Netflix's stock has fallen over 15%, primarily due to earnings missing estimates and a cautious outlook, which dampened investor sentiment and triggered a selloff.
- Buyback Plan Update: Netflix announced an additional $25 billion stock buyback in a regulatory filing last month, on top of the remaining $6.8 billion under its 2024 repurchase program, demonstrating the company's commitment to enhancing shareholder value despite current market challenges.
- Market Sentiment Shift: On Stocktwits, retail sentiment regarding NFLX shifted from 'bullish' to 'neutral', with message volumes rising nearly sixfold in the past 24 hours, reflecting mixed investor opinions on the recent price drop, with some viewing it as a buying opportunity.
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- Financial Performance Beat: The company reported a 2% year-over-year revenue increase to $7.35 billion, exceeding analysts' expectations of $7.28 billion, while adjusted EBITDA surged 59% to $1.16 billion, demonstrating effective strategies in cost control and revenue growth.
- Cautious Future Outlook: Despite reaffirming its 2026 targets of $30 billion in revenue and $3.8 billion in adjusted EBITDA, the current quarter's projections fell short of analyst expectations, which may impact investor confidence moving forward.
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- High-Margin Business: Although Amazon does not disclose advertising operating income, it is widely regarded as a high-margin business, and given the low margins of retail, the growth of the advertising segment is expected to enhance overall profitability, pushing the company's operating margin to a historic high of 13.1% in Q1.
- Strategic Partnership Expansion: Amazon deepened its partnership with Netflix by launching the Amazon Audiences feature, allowing advertisers to leverage signals from Amazon's shopping and streaming platforms, thereby expanding the reach of its advertising platform and enhancing ad effectiveness.
- AI Tool Innovations: Amazon expanded Creative Agent to seven additional countries and introduced sponsored product and brand prompts within its AI shopping assistant Rufus, which saw monthly active users grow over 115% and engagement increase nearly 400% year-over-year, indicating that AI-driven shopping experiences will provide sustained growth momentum for its advertising business.
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- High Margin Impact: While Amazon does not disclose advertising operating income, it is widely viewed as a high-margin business, expected to significantly enhance overall profitability, especially given the low-margin nature of its retail segment, thus providing an additional earnings catalyst.
- Technological Innovation and Partnerships: Amazon has deepened its partnership with Netflix and expanded local advertising collaboration with Comcast Advertising, while also launching interactive video ads and the AI creative assistant CreativeAgent, which enhances ad effectiveness and user engagement.
- Future Growth Potential: With Q1 operating margin hitting a record high of 13.1%, CEO Andy Jassy emphasized that AI-driven shopping experiences will create more opportunities for advertising, suggesting that the advertising segment will continue to play a crucial role in future growth.
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- Alphabet's Cloud Growth: Alphabet achieved $110 billion in revenue in Q1, a 22% year-over-year increase, with Google Cloud revenue surging 63%, and despite uncertainties from the Middle East, its 30 P/E ratio remains attractive to investors, indicating long-term growth potential.
- Netflix's Revenue Growth: Netflix's revenue exceeded $12 billion in Q1, growing 16% year-over-year, with net income reaching $5.3 billion, and despite facing uncertainties and high tax burdens, its ad revenue is expected to double, enhancing its competitive position in the market.
- Industry Safe Haven: Given that these companies primarily rely on the U.S. market and digital advertising, investors may view them as safe havens amid the Middle East conflict, especially as supply chain risks increase, further enhancing their appeal.
See More
Netflix Prudently Walks Away from Major Acquisition
- Acquisition Decision: Netflix prudently walked away from a significant acquisition following a drop in its stock price on the afternoon of May 1, 2026, demonstrating the company's cautious approach to protecting shareholder interests amid market volatility.
- Market Reaction: This decision negatively impacted Netflix's stock price when the video was published on May 3, reflecting investor concerns about the company's future growth potential, which could affect its short-term market performance.
- Strategic Shift: The abandonment of the acquisition indicates that Netflix may be reassessing its expansion strategy, focusing instead on internal content development and user growth to address the intensifying competition in the streaming market.
- Risk Management: By avoiding high-risk acquisitions, Netflix showcases its risk management capabilities in uncertain market conditions, aiming to maintain long-term financial health and market position.
See More
Reed Hastings Sells 407,550 Shares of Netflix
- Share Sale Details: Reed Hastings sold 407,550 shares of Netflix for $37.96 million in three transactions at average prices of $92.283, $93.5427, and $94.1689, indicating a strategic reduction in his holdings amid market fluctuations.
- Stock Price Decline: Since reporting first-quarter earnings on April 16, Netflix's stock has fallen over 15%, primarily due to earnings missing estimates and a cautious outlook, which dampened investor sentiment and triggered a selloff.
- Buyback Plan Update: Netflix announced an additional $25 billion stock buyback in a regulatory filing last month, on top of the remaining $6.8 billion under its 2024 repurchase program, demonstrating the company's commitment to enhancing shareholder value despite current market challenges.
- Market Sentiment Shift: On Stocktwits, retail sentiment regarding NFLX shifted from 'bullish' to 'neutral', with message volumes rising nearly sixfold in the past 24 hours, reflecting mixed investor opinions on the recent price drop, with some viewing it as a buying opportunity.
See More
Paramount Skydance Reports Strong Q1 Results with Subscriber Growth
- Subscriber Growth: Paramount Skydance added 700,000 subscribers to Paramount+, bringing the total to nearly 80 million, although sequential growth is expected to flatten in Q2, providing a stronger user base in a competitive streaming market.
- Financial Performance Beat: The company reported a 2% year-over-year revenue increase to $7.35 billion, exceeding analysts' expectations of $7.28 billion, while adjusted EBITDA surged 59% to $1.16 billion, demonstrating effective strategies in cost control and revenue growth.
- Cautious Future Outlook: Despite reaffirming its 2026 targets of $30 billion in revenue and $3.8 billion in adjusted EBITDA, the current quarter's projections fell short of analyst expectations, which may impact investor confidence moving forward.
- Acquisition Integration Challenges: As Paramount pursues its acquisition of Warner Bros. Discovery, the positive short-term results may be overshadowed by the integration process and significant debt burden, necessitating close attention to regulatory approval developments.
See More
Amazon's Advertising Business Shows Significant Growth
- Advertising Revenue Growth: Amazon's first-quarter advertising services revenue reached $17.2 billion, marking a 24% year-over-year increase and achieving 22% currency-neutral growth over the past four quarters, indicating strong growth potential for its advertising business that could significantly support future profitability.
- High-Margin Business: Although Amazon does not disclose advertising operating income, it is widely regarded as a high-margin business, and given the low margins of retail, the growth of the advertising segment is expected to enhance overall profitability, pushing the company's operating margin to a historic high of 13.1% in Q1.
- Strategic Partnership Expansion: Amazon deepened its partnership with Netflix by launching the Amazon Audiences feature, allowing advertisers to leverage signals from Amazon's shopping and streaming platforms, thereby expanding the reach of its advertising platform and enhancing ad effectiveness.
- AI Tool Innovations: Amazon expanded Creative Agent to seven additional countries and introduced sponsored product and brand prompts within its AI shopping assistant Rufus, which saw monthly active users grow over 115% and engagement increase nearly 400% year-over-year, indicating that AI-driven shopping experiences will provide sustained growth momentum for its advertising business.
See More
Amazon's Advertising Revenue Grows 22% Year Over Year
- Advertising Revenue Surge: Amazon's Q1 advertising services revenue reached $17.2 billion, marking a 24% year-over-year increase and a 22% growth on a constant-currency basis, indicating strong market demand and the potential of its advertising business.
- High Margin Impact: While Amazon does not disclose advertising operating income, it is widely viewed as a high-margin business, expected to significantly enhance overall profitability, especially given the low-margin nature of its retail segment, thus providing an additional earnings catalyst.
- Technological Innovation and Partnerships: Amazon has deepened its partnership with Netflix and expanded local advertising collaboration with Comcast Advertising, while also launching interactive video ads and the AI creative assistant CreativeAgent, which enhances ad effectiveness and user engagement.
- Future Growth Potential: With Q1 operating margin hitting a record high of 13.1%, CEO Andy Jassy emphasized that AI-driven shopping experiences will create more opportunities for advertising, suggesting that the advertising segment will continue to play a crucial role in future growth.
See More
Middle East Conflict's Impact on Semiconductor Sector
- Strong Performance by Meta: Meta Platforms reported $56 billion in revenue for Q1 2026, a 33% increase year-over-year, primarily driven by digital advertising, demonstrating resilience amid Middle East conflict, while its $27 billion net income significantly surpassed last year's $17 billion, showcasing robust profitability.
- Alphabet's Cloud Growth: Alphabet achieved $110 billion in revenue in Q1, a 22% year-over-year increase, with Google Cloud revenue surging 63%, and despite uncertainties from the Middle East, its 30 P/E ratio remains attractive to investors, indicating long-term growth potential.
- Netflix's Revenue Growth: Netflix's revenue exceeded $12 billion in Q1, growing 16% year-over-year, with net income reaching $5.3 billion, and despite facing uncertainties and high tax burdens, its ad revenue is expected to double, enhancing its competitive position in the market.
- Industry Safe Haven: Given that these companies primarily rely on the U.S. market and digital advertising, investors may view them as safe havens amid the Middle East conflict, especially as supply chain risks increase, further enhancing their appeal.
See More
