Immune to tariffs and bolstered by ad revenue, it may defy the broader selloff.
But with $1,000 in sight, can strong results keep the rally alive—or will fair value drag it back down?
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The U.S. quarterly earnings season continues under the shadow of the ongoing tariff war, focused on the Washington-Beijing axis. In addition to major financial institutions, the first stock market giant to report will be Netflix. Over the last four quarters, the company has consistently beaten consensus estimates for earnings per share and revenue, triggering strong upside reactions—around 10%—in the second half of last year immediately after results were released.
In recent sessions, Netflix (NASDAQ:) shares have been climbing with the aim of resuming an uptrend and breaking back above $1,000 per share—something that may be achievable if today’s earnings are again strong.
Sanctions Immunity a Major Asset for Netflix?
Following Donald Trump’s unveiling of a sweeping tariff plan on “Emancipation Day,” investors have started identifying companies that may be more insulated from the administration’s aggressive economic policies. Netflix appears to be among them. Thanks to its global expansion, Netflix is likely to remain mostly unaffected by tariffs, which is a clear advantage in the current climate.
Moreover, the streaming giant may be resilient to potential recessionary pressures, as consumers tend to hold on to low-cost entertainment options like Netflix even in tougher economic times. This resilience is reflected in the company’s modest but positive performance in recent weeks, compared to the significant losses seen across the broader S&P 500.
Beyond subscription revenues, Netflix is seeing a growing share of income from advertising. According to Q4 2024 data, 55% of subscribers opted for ad-supported plans, and management expects this trend to continue. Forecasts suggest revenue growth of 12%–14% in 2025, along with a margin growth rate of 29%.
Significant Number of Downward Revisions Ahead of Results
While consensus forecasts for earnings per share and revenue suggest higher results than the same period last year, what stands out is the sharp imbalance in revisions: downward adjustments far outnumber upward ones.
Source: InvestingPro
On a fundamental level, the company still holds solid credentials, including a top Piotroski score. However, its fair value indicator suggests the potential for a correction of just over 18%.
Source: InvestingPro
Today’s earnings release will be crucial for maintaining the current uptrend. If results disappoint, the market could quickly shift to pricing in that fair value, risking a near-term pullback.
Technical Reactions in Netflix Shares
Netflix’s stock has experienced a minor rollercoaster in recent sessions due to market volatility. It recently bounced from strong support near $830 per share, where the current upward momentum began. Bulls are now testing the psychologically significant $1,000 level, which is acting as short-term resistance.
If earnings come in strong, the base case scenario would be a breakout above this level and a possible run toward historical highs. Conversely, if results disappoint, investor attention may return to the $830 support zone. A break below that could trigger a broader correction.
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Disclaimer: This article is written for informational purposes only. It is not intended to encourage the purchase of assets in any way, nor does it constitute a solicitation, offer, recommendation or suggestion to invest. I would like to remind you that all assets are evaluated from multiple perspectives and are highly risky, so any investment decision and the associated risk belongs to the investor. We also do not provide any investment advisory services.
