Netflix Stock Looking For Next Catalyst

Netflix (NFLX) The stock has been treading water for the past three months, waiting for a catalyst. That could come in the form of the third-quarter earnings report on October 21.

The Internet TV network could also get a boost from the fifth and final season of its hit series “Stranger Things” next month.

Netflix stock has been on the rise lately, rising above the 50-day moving average line this week. It has been buoyed by calls from conservative leaders in the US to cancel the service over some controversial programming choices.

Netflix stock has held steady over the past 15 weeks with a buy point of 1,341.15, according to IBD MarketSurge charts. This buy point is also the stock’s all-time high, reached on June 30th.

On the stock market today, Netflix stock fell 0.9% to close at 1,220.08.

The Los Gatos, California-based company will report third-quarter results in less than two weeks. Analysts surveyed by FactSet expect Netflix to earn $6.96 per share on revenue of $11.51 billion. This would translate into annual growth of 29% in profits and 17% in sales.

For the fourth quarter, Wall Street expects Netflix earnings to be $5.43 per share, up 27%, on revenue of $11.89 billion, up 16%.

Netflix stock upgraded to buy

On Monday, Seaport Research upgraded Netflix shares to Buy from Neutral. It also raised its price target to 1,385 from 1,230. The company is optimistic about the growth of Netflix’s ad-supported service.

However, on Tuesday, TD Cowen analyst John Blackledge cut his price target on Netflix stock to 1,425 from 1,450 but maintained his buy rating.

In terms of programming, the upcoming release of the fifth season of Stranger Things has been divided into three parts. The four-episode first volume will premiere on November 26, followed by the three-episode volume two on December 25 and the finale on December 31.

“We expect a strong TV and movie slate in the fourth quarter, including the global hit Stranger Things (S5) and a slew of high-profile films, to drive strong member trends through the end of the year,” Blackledge said in a note to clients.

Meanwhile, Netflix announced on Wednesday that it will bring video games to TV screens for the first time. Until now, Netflix has only offered games on mobile devices.

The company has announced several party games coming to TVs this holiday season, including “Boggle Party” and “Pictionary: Game Night.” Players will use their smartphones as controllers.

Netflix stock has an IBD Composite Rating of 95 out of 99, according to IBD Stock Screener. The composite rating scores a stock’s key growth metrics against all other stocks regardless of industry group.

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

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