Netflix Stock Drops Below Key Level Before Q3 Report

Internet television network Netflix (NFLX) will report third-quarter results late Tuesday and Wall Street is on edge. Netflix stock fell ahead of the news.

Netflix shares have fallen for five straight trading sessions. On Wednesday, Netflix stock fell below the 50-day moving average line, a key support level, according to IBD MarketSurge charts.

On the stock market today, Netflix stock fell 1.6% to close at 1,183.59.

Analysts surveyed by FactSet expect the live video streaming company to earn $6.96 per share on sales of $11.51 billion in the September quarter. This would translate into annual growth of 29% in profits and 17% in sales.

For the current quarter, Wall Street expects Netflix to report earnings of $5.43 per share, up 27%, on sales of $11.89 billion, up 16%.

A key focus of the third-quarter report will be the progress Netflix has made in expanding its ad-supported services.

Bernstein analyst Laurent Yoon on Thursday reiterated his outperform rating on Netflix shares with a price target of 1,390.

He said in a report that he expects good trends in Netflix subscriber engagement in the third quarter. Popular content in the fourth quarter included “Wednesday” Season 2, “Squid Game” Season 3, and the KPop movie “Demon Hunters.”

Why is the analyst neutral on Netflix stock?

The fourth quarter will see the return of the monster series “Stranger Things” on Netflix as well as blockbusters like “Frankenstein,” “A House of Dynamite” and “Wake Up Dead Man: A Knives Out Mystery.” It is also proud of the return of the famous series “The Diplomat” and “The Witcher”.

UBS analyst John Hodulik on Wednesday maintained his buy rating on Netflix shares with a price target of 1,495.

Netflix should be able to maintain double-digit revenue growth for the foreseeable future thanks to member growth, higher prices and increased advertising, Hodulik said in a client note.

Meanwhile, Monness Crespi Hardt analyst Brian White on Thursday maintained his neutral rating on Netflix stock.

“Netflix has built a formidable entertainment platform and is developing a promising digital advertising franchise; however, the competition is dynamic, the valuation is rich, and the kidneys are treacherous,” White said in a report.

Follow Patrick Seitz on X at IBD_PSeitz for more stories on consumer technology, software, and semiconductor stocks.

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