Can Netflix Stock Replicate Last Year's Growth Again in 2021?

NFLX is slated to report earnings next week, on January 19

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Netflix Inc (NASDAQ:NFLX) has seen a marked decrease of 9.4% in stock value since the start of the year. Nonetheless, the equity is still up approximately 69% from its March 17, annual low of $290.25, with potential support from its 80-day moving average curbing any additional pullbacks.  

Netflix is set to release its earnings and financials from the fourth quarter of 2020 after the close on Jan. 19, and investors are eager to see how the company concluded the year. Analysts anticipate that the company will report earnings per share (EPS) of $1.38 for Q4, a decrease when compared to its third-quarter earnings. Furthermore, NFLX outperformed Wall Street's expectations on just one of its four most recent earnings reports. That earnings beat was for the final quarter of 2019.

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For the fourth quarter of 2019, NFLX beat expectations by a wide margin of 77 cents, with the streaming content provider reporting an EPS of $1.30. For the first quarter of 2020, the firm's EPS rose to $1.57, but failed to meet analysts' expectations. This time, the earnings miss was by a margin of $0.08. Netflix reported another slight increase in earnings for the second quarter of 2020, posting an EPS of $1.59. However, NFLX still missed expectations by a margin of $0.22. Finally, in its most recently reported quarter, Netflix stock reported earnings of $1.74 per share, missing expectation by a margin $0.40.

Netflix has more than doubled its annual revenue and just about quintupled its net income over the past three years. In total Netflix has generated nearly $24 billion in revenues and $2.8 billion in net profits these past 12 months. Overall, Netflix stock remains a good growth candidate for investors' portfolios amongst the other mega cap (worth more than $200 billion) companies. 

 

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