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Yahoo
18-07-2025
- Business
- Yahoo
Netflix's Blockbuster Profits Overshadowed By 'Anemic' Engagement
Despite delivering a robust second-quarter earnings report that surpassed analyst expectations and raised full-year guidance, Netflix (NASDAQ:NFLX) stock dipped over 5% on Friday, leaving investors to weigh strong financials against underlying concerns. The company reported second-quarter revenue of $11.08 billion, up 16% year-over-year (Y/Y). The revenue total beat a Street consensus estimate of $11.04 billion. The company reported second-quarter earnings per share of $7.19, beating a Street consensus estimate of $7.06. The quarter's operating margins were 34%, beating the company's attributed more members, higher pricing, and increased advertising revenue to helping boost revenue and operating margins. Netflix expects third-quarter revenue of $11.526 billion, up 17% Y/Y, and earnings per share of $6.87. Both figures are above Street estimates. The company also raised full-year revenue guidance to $44.8 billion-$45.2 billion, up from a previous range of $43.5 billion-$44.5 billion. Netflix is guiding for operating margins of 29.5% for the whole year. Wall Street Analysts Weigh In In the wake of Netflix's recent financial disclosures, several prominent Wall Street analysts have issued updated ratings and price forecasts for the streaming company. Rosenblatt's Barton Crockett maintained a Buy rating, nudging his price forecast up a dollar from $1,514 to $1,515. Similarly, Needham's Laura Martin reiterated a Buy rating with a $1,500 price forecast. On the other hand, JP Morgan's Doug Anmuth kept a Neutral rating but increased his price forecast from $1,230 to $1,300. Finally, Bank of America Securities analyst Jessica Reif Ehrlich reiterated her Buy rating, setting a price forecast of $1,490. Rosenblatt's Bullish Stance Crockett responded positively to Netflix's second-quarter 2025 results and raised guidance, highlighting steady financial performance and optimism for the year's second half despite mixed engagement trends. The analyst noted that Netflix's quarterly revenue exceeded guidance by $44 million due to currency tailwinds. He said the constant currency growth of 17% aligned with forecasts, with subscriber growth, ads, and pricing driving revenue. Crockett noted that operating income rose 45% Y/Y, beating guidance by $100 million on substantial margin expansion. While Netflix no longer reports subscriber numbers, the analyst flagged mixed engagement data. Total hours streamed rose just 1% Y/Y in the first half of 2025, down from 4.5% in the second half of 2024, raising questions about Netflix's claim to chase the remaining 80% of global TV viewing time, he noted. However, Crockett expects engagement to improve in the second half of 2025, with June finishing strong due to Squid Game 3. Anticipated releases like Stranger Things, Wednesday, Knives Out 3, Happy Gilmore 2, and Christmas NFL games are likely to boost viewership, as per the analyst. Netflix raised its fiscal 2025 revenue forecast, reflecting that optimism, Crockett noted. It also lifted operating margin expectations to 30% (from 29%) and raised free cash flow guidance. The analyst highlighted ad revenue doubling Y/Y as another key driver. Needham's Cautious Praise Martin largely praised Netflix's strong quarterly results and upbeat guidance but flagged concerns around engagement trends, sports strategy, and content bets that led to a muted stock reaction after hours. The analyst flagged weak engagement growth in the quarter, with total viewing time appearing flat or declining per user. She characterized engagement growth in the second quarter of 2025 as anemic, implying a year-over-year decline on a per-person basis. She emphasized that improving engagement is critical for pricing power, especially as Netflix no longer reports subscriber numbers or ARPU. Netflix's push to partner with YouTube creators and video podcasters impressed Martin, who noted it as a strategic shift to stay competitive with YouTube's content ecosystem. The analyst cited the TF1 deal in France as a smart test case for acquiring local content at scale and low cost. She noted Netflix's optimism about GenAI tools, which will improve content quality, discovery, and ad targeting. The company's dismissive stance on live sports raised eyebrows, and Martin questioned the decision given sports' proven impact on engagement and subscriber retention in the broader streaming space. On user experience, the analyst welcomed the long-overdue UI/UX overhaul, noting Netflix's efforts to modernize navigation to reflect its expanded offerings, such as video games and live shows. Despite its financial strength, Netflix reiterated it has no plans to acquire legacy media networks, preferring to return cash to shareholders, a move Martin noted as a sign of financial discipline. While Netflix plans to ramp up video game investment based on subscriber retention metrics, the analyst noted early adoption has fallen short of expectations. J.P. Morgan's Neutral View Anmuth viewed Netflix's quarterly results and full-year guidance as solid, reflecting strong execution across content, advertising, and monetization. However, the stock traded lower after hours as expectations were already high. While engagement rose just 1% in the first half of 2025, the analyst expects a meaningful ramp in the second half with the return of major titles like Squid Game S3, Stranger Things S5, and Wednesday S2. He noted that this slate could unlock stronger per-user engagement and pricing power. Anmuth emphasized that Netflix is well-positioned to become a 'global TV' leader by expanding into verticals like live, broadcast, and animation, while boosting scripted and unscripted formats. The analyst also spotlighted Netflix's growing advertising business. Ad revenue will likely double in 2025 to $2.9 billion, driven by expanding third-party DSP partnerships (e.g., Google, Yahoo, Xandr) and the rollout of the Netflix Ads Suite and interactive formats. While advertising is still catching up to Netflix's user base, Anmuth noted that ad-tier monetization is improving. He said they project ad-tier subscribers could reach 60 million by year-end, representing over 130 million monthly active users. Despite the strong guide and bullish tone, he remained cautious in the near term, as buy-side expectations are already priced in. Bank of America Securities' Continued Optimism Ehrlich reacted positively to Netflix's quarterly 2025 results and raised guidance, reinforcing her bullish stance on the stock while acknowledging that high investor expectations may have muted the immediate market response. The analyst praised Netflix for delivering another strong quarter driven by rising membership, price hikes, and ad revenue. She noted broad-based regional strength, with all markets delivering double-digit FX-neutral revenue gains. Netflix raised full-year 2025 revenue guidance, citing favorable currency trends, subscriber gains, and ad momentum. While Netflix shares have surged over 40% year-to-date and now trade near 40x forward earnings, Ehrlich noted the company remains well-positioned for continued outperformance, supported by a strong brand, global scale, and growing ad and live content opportunities. Why the Stock Dipped: Investor Expectations and Engagement Concerns The paradoxical dip in Netflix's stock despite strong financials is largely attributed to elevated investor expectations. While the company's performance was excellent, some analysts and investors might have hoped for an even more bullish outlook, especially given the stock's significant appreciation year-to-date (over 40%). Concerns over engagement trends, specifically the modest 1% Y/Y increase in total hours streamed in the first half of 2025, also played a role. Additionally, the company's warning of lower operating margins in the second half of 2025 due to increased content amortization and sales and marketing costs for a larger content slate may have contributed to investor caution. Price Action: NFLX stock is trading lower by 4.64% to $1,215.18 at last check Friday. Image via Shutterstock Latest Ratings for NFLX Date Firm Action From To Mar 2022 Wedbush Upgrades Underperform Neutral Jan 2022 Citigroup Upgrades Neutral Buy Jan 2022 Rosenblatt Maintains Neutral View More Analyst Ratings for NFLX View the Latest Analyst Ratings Up Next: Transform your trading with Benzinga Edge's one-of-a-kind market trade ideas and tools. Click now to access unique insights that can set you ahead in today's competitive market. Get the latest stock analysis from Benzinga? NETFLIX (NFLX): Free Stock Analysis Report This article Netflix's Blockbuster Profits Overshadowed By 'Anemic' Engagement originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Mint
17-07-2025
- Business
- Mint
Netflix Is at Risk of Earnings Letdown After $250 Billion Rally
(Bloomberg) -- With Netflix Inc. shares trading near their highest valuations going back to 2022, there's a lot riding on the streaming giant's upcoming earnings report and its outlook for the months ahead. Expectations have been building around a second-half slate of blockbuster sequels, including the highly anticipated Stranger Things. The stock price has nearly doubled over the past year, adding about $250 billion in market value and lifting its price-to-estimated earnings ratio to 43 times, well above the Nasdaq 100 at 27 times. The firm is due to report second-quarter results Thursday after US markets close. 'Netflix shares are priced for perfection, there isn't a lot of room for error,' said Daniel Morgan, senior portfolio manager at Synovus Trust Co. 'Everybody is expecting the second half to be really strong.' In recent years, Netflix has refined its business model after subscriber additions stalled as stay-at-home measures eased following the pandemic. It now has multiple levers to pull, including advertising sales, subscription price increases and the addition of live events like sports and concerts. The streaming giant has stopped reporting quarterly subscriber numbers this fiscal year, a key metric that had long been the primary way Wall Street evaluated the company's performance. In its absence investors are more focused on revenue and profit forecasts. Wall Street is anticipating third-quarter earnings per share of $6.70 on revenue of $11.3 billion, according to the average of analyst estimates compiled by Bloomberg. That would be an increase of 24% and 15%, respectively, from the same period a year ago. There may be disappointment if the company fails to raise its full-year sales forecast of $43.5 billion to $44.5 billion, after not doing so following strong first-quarter results in April, according to Rosenblatt Securities Inc. analyst Barton Crockett. He also cited the risk that Netflix could fall prey to changing viewership habits, with 'a rising narrative' of the firm potentially losing leadership in US streaming to Alphabet Inc.'s YouTube. 'While Netflix is dismissive of YouTube as a feeder ground for content talent Netflix can poach, we see a generational change in consumer preferences that could over time prove a headwind,' Crockett wrote. Analysts acknowledge that a lot of the stock's multiple bakes in the buzz surrounding its highly-anticipated content — which also includes a new Wednesday series and Adam Sandler starring in Happy Gilmore 2. 'We believe that plenty of the long-term opportunity set is factored into the shares at this price,' wrote Seaport Research Partners analyst David Joyce in a note cutting the rating on Netflix to neutral from buy this month. 'The company needs time to execute against the expectations in advertising, aggregating, launching experiences, and expanding share again.' Options data indicate that the stock is set to rise or fall by about 6.5% the day after results, less than the 9.3% average move following earnings. That would be the smallest swing in at least three years, according to data compiled by Bloomberg. Still, there is plenty of optimism ahead of the release. BofA Securities Inc. analysts led by Jessica Reif Ehrlich said that Netflix is well-positioned given its 'unmatched scale in streaming, further runway for subscriber growth, significant opportunities in advertising and sports/live and continued earnings and FCF (free cash flow) growth.' More than two-thirds of analysts covering the streaming platform have a buy-equivalent rating on the stock, while revenue growth is expected range from 14% to 16% for the next three quarters, according to data compiled by Bloomberg. With no direct exposure to tariff uncertainty or China-related risks, the stock is 'incredibly positioned, even compared to many of the Magnificent Seven,' Kenneth Leon, director at CFRA Research, said in an interview. --With assistance from Christian Dass. More stories like this are available on
Yahoo
26-06-2025
- Business
- Yahoo
Rosenblatt Reiterates 'Buy' Rating for Atlanta Braves (BATRK) on Revenue Growth Drivers
Atlanta Braves Holdings, Inc. (NASDAQ:BATRK) is one of the 11 best performing Warren Buffett stocks in 2025. On June 20, Rosenblatt Securities reiterated its 'Buy' rating for the Atlanta Braves stock and increased its price target to $69 from $52. A customer data analyst working at a computer, surrounded by monitors displaying live sports data. The update comes from analyst Barton Crockett, who highlighted the Atlanta Braves' loyal and engaged fan base as a significant asset. Crockett also anticipates the company's revenue will keep growing. Several drivers will make this happen, including robust performance in ticket revenue, solid media rights agreements, ongoing success in securing sponsorships, and the continued monetization of The Battery Atlanta. The Battery Atlanta is a mixed-use development adjacent to Truist Park. Crockett's report also acknowledges the Atlanta Braves' strategic initiatives to enhance the overall fan experience and drive sustained financial growth. Atlanta Braves Holdings, Inc. (NASDAQ:BATRK) is a sports and entertainment company. Through its subsidiary Braves Holdings, LLC, it owns and operates the Atlanta Braves Major League Baseball team and its home stadium, Truist Park. The company has two segments: Baseball and Mixed-Use Development. In addition to baseball operations, it manages The Battery Atlanta. While we acknowledge the potential of BATRK as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: and . Disclosure: None. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
25-06-2025
- Business
- Yahoo
Rosenblatt Reiterates 'Buy' Rating for Atlanta Braves (BATRK) on Revenue Growth Drivers
Atlanta Braves Holdings, Inc. (NASDAQ:BATRK) is one of the 11 best performing Warren Buffett stocks in 2025. On June 20, Rosenblatt Securities reiterated its 'Buy' rating for the Atlanta Braves stock and increased its price target to $69 from $52. A customer data analyst working at a computer, surrounded by monitors displaying live sports data. The update comes from analyst Barton Crockett, who highlighted the Atlanta Braves' loyal and engaged fan base as a significant asset. Crockett also anticipates the company's revenue will keep growing. Several drivers will make this happen, including robust performance in ticket revenue, solid media rights agreements, ongoing success in securing sponsorships, and the continued monetization of The Battery Atlanta. The Battery Atlanta is a mixed-use development adjacent to Truist Park. Crockett's report also acknowledges the Atlanta Braves' strategic initiatives to enhance the overall fan experience and drive sustained financial growth. Atlanta Braves Holdings, Inc. (NASDAQ:BATRK) is a sports and entertainment company. Through its subsidiary Braves Holdings, LLC, it owns and operates the Atlanta Braves Major League Baseball team and its home stadium, Truist Park. The company has two segments: Baseball and Mixed-Use Development. In addition to baseball operations, it manages The Battery Atlanta. While we acknowledge the potential of BATRK as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: and . Disclosure: None. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CNBC
09-06-2025
- Business
- CNBC
Apple unveils 'liquid glass' technology and other new features
CNBC's Steve Kovach, Rosenblatt's Barton Crockett and Deepwater Asset's Gene Munster, join 'The Exchange' to discuss the takeaways from Apple's WWDC event.
