CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved.

Netflix share price: how 8 top analysts responded to the Q2

We look at how some of Wall Street’s most important analysts responded to the streaming giant’s Q2 results.

Netflix beat its own guidance as part of its second quarter update, but weak guidance for the quarter ahead has seen sentiment sour, with the stock trending lower since the earnings release. The stock is down 7.37% in the last five sessions, finishing out Wednesday's session at $513.63 per share.

Q2 summary

On the top-line, the streaming giant reported second quarter revenues of $7.2 billion, representing a year-on-year increase of 19%; while growth in operating income came in at an accelerated pace, rising 36% during the quarter, hitting $1.8 billion.

Those revenue figures were driven by solid Q1 net subscriber growth numbers. Here, the streaming giant beat its prior guidance by about 500 thousand, revealing total net paid subscriber additions of 1.5 million. The majority of that growth was driven by a steep increase in paying subscribers from the APAC region.

While those Q2 figures actually beat on what analysts were expecting in the second quarter (with Wall Street forecasting net sub adds of 1.12 million), it was the company’s Q3 subscriber guidance that looks to have disappointed the market.

Netflix’s management told the market they expected to add 3.5 million subscribers in the upcoming third quarter, well below Street estimates of 5.86 million Q3 net subscriber additions.

Netflix share price outlook: the analyst view?

While the streaming giant undershot that guidance, Wall Street in general responded positively to the Q2. Here’s how 8 top analysts responded to the earnings:

  • Analysts from Oppenheimer reiterated their Buy rating and left their $620 price target unchanged
  • JP Morgan analysts raised their price target to $625 from $600 and kept their Overweight rating
  • Deutsche Bank reiterated their Buy rating and upgraded their price target from $575 to $590
  • KeyCorp lowered their price target, though maintained their Overweight rating
  • Wedbush reiterated their Underperform rating and price target of $342
  • Credit Suisse raised their price target from $583 to $643 and shifted their rating from Buy to Outperform
  • Stifel Nicolaus analysts boosted their price target from $60 to $580 and maintain their Buy rating

Do you have a view on Netflix? Whatever you think, you can use CFDs to trade stocks and other assets, through IG’s world-class trading platform.

For example, to buy (long) or sell (short) a variety of local and international stocks using CFDs, follow these easy steps:

  • Create an IG Trading Account or log in to your existing account
  • Enter <Company name> in the search bar and select it
  • Choose your position size
  • Click on ‘buy’ or ‘sell’ in the deal ticket
  • Confirm the trade

For investors not looking to trade stocks, you can invest in shares directly through our share trading service.

The COVID elephant

While the pandemic was a boon for Netflix, it has created distinct problems. Comps are more difficult and we are ultimately seeing the impact of immense amounts of growth being pulled forward.

'The pandemic has created unusual choppiness in our growth and distorts year-over-year comparisons as acquisition and engagement per member household spiked in the early months of COVID,’ Netflix management said.

Despite that, using the pre-COVID period as a base, management noted that they have observed good retention levels, saying:

'Retention continues to be strong and better than pre-COVID Q2'19 levels, even as average revenue per membership has grown 8% over this two-year period, demonstrating how much our members value Netflix and that as we improve our service we can charge a bit more.'

Where is Netflix heading from here? Open an IG Account to trade stocks like Netflix long or short today.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.