Netflix Slips Premarket Despite Beating Earnings Estimates.
Netflix shares dip in premarket trading despite strong earnings and an upward revision to annual revenue guidance.
FUNDAMENTAL OVERVIEW:
Shares of Netflix (NASDAQ: NFLX) edged lower in premarket trading on Friday, as the company’s strong second-quarter earnings and raised annual revenue guidance fell short of elevated analyst expectations.
Boosted by the final season of its blockbuster series Squid Game, along with subscription price hikes and steady membership growth, Netflix reported diluted EPS of $7.19, beating the $7.08 estimate, according to LSEG data via Reuters. Revenue for the quarter ending June 30 reached $11.08 billion, slightly above the $11.07 billion forecast.
The streaming giant, which raised prices on its U.S. plans earlier this year, saw a 15% year-over-year revenue increase from the U.S. and Canada segment, up from 9% in the previous quarter. Growth was driven by a combination of higher subscriber numbers, increased pricing, and a boost in ad revenue.
Netflix also noted it’s wrapping up upfront ad negotiations for 2025 and still anticipates its ad revenue will roughly double year-over-year. The company is expanding its content portfolio to include live events, aiming to attract more viewers and advertisers.
It raised full-year revenue guidance to a range of $44.8 billion to $45.2 billion, up from $44.5 billion, and lifted its operating margin forecast to 29.5% from 29%.
NETFLIX TECHNICAL ANALYSIS CHART:
Technical Overview:
Netflix is trading within an up channel.
Netflix is moving above all the Moving Averages (SMA).
The Relative Strength Index (RSI) is in the Buying Zone, while the Stochastic oscillator suggests a Positive trend.
Immediate Resistance level: 1303.00
Immediate support level: 1244.77
HOW TO TRADE NETFLIX
On the higher time frame, Netflix initially maintained a strong uptrend but encountered resistance at the top, triggering a sharp downside reversal that pushed the price down to a major support level, where it eventually stabilized.
Currently, the stock has rebounded from this key support zone and has broken above its immediate resistance level. If Netflix sustains above this breakout zone, further upside momentum could follow
