Netflix Expected to Witness Substantial Stock Price Movement Post Earnings Report

Netflix's first-quarter results are likely to trigger significant fluctuations in its stock prices, with options traders predicting around an 8.5% movement in either direction in the week following the release. This indicates a potential price range of $893.47 to $1,059.09 for Netflix's stock. Options prices for most stocks are hinting at high market volatility as we head into the earnings report, and this trend is evident in Netflix's case. According to JPMorgan analysts, the options market is currently pricing in the highest mean expected swings since the first quarter of 2020. The average anticipated earnings-day shift for stocks covered by them is around 8.1% for this quarter, in contrast to a recorded average of 6.5% in the preceding quarter and 5.9% over the past three years. The analysts also established through comparisons that Netflix's post-earnings volatility has historically been among the most underpriced or "cheapest". The stock’s average post-earnings move over the past three years has been about 11%. Among large S&P 500 stocks, only nine, including tech behemoths Nvidia, Meta, Broadcom, and Oracle, are being priced in for smaller-than-average moves. Notably, Netflix's stock has surged post each of its previous two earnings reports. The shares climbed nearly 10% following better-than-estimated earnings for Q4 last year and an increased revenue forecast for 2025, along with a $15 billion boost to its share buyback program. Subsequently, satisfying top and bottom line expectations and strong demand for its ad-supported subscription model pushed the shares up by 11% in October of last year. Additionally, there was a boost in Netflix's stock on Tuesday following a report indicating that the streaming service is targeting a doubling of its revenue to roughly $78 billion by 2030. This is a goal that the company hopes will elevate it to the $1 trillion market capitalization league, alongside tech leaders like Alphabet and Amazon. Analysts remain largely optimistic about Netflix's stock before the earnings announcement. On Monday, Oppenheimer maintained its “buy” rating and $1,150 price target, expressing confidence in the company's resilience against tariffs and an economic slowdown. Despite a 1.5% drop in Netflix's shares on Wednesday amidst a wide-ranging sell-off, the company's stocks have seen an 8% increase this year and a 56% rise over the last year.