Netflix NFLX is set to release fourth-quarter 2021 results on Jan 20 after market close. Being the world's largest video streaming company, it is worth taking a look at its fundamentals ahead of the results.
The stock has underperformed the broad industry, having plunged 17.7% over the past three months compared to the industry’s average loss of 14.9%. The weak trend might reverse if Netflix comes up with an earnings beat. As a result, ETFs with the largest allocation to this streaming giant like MicroSectors FANG+ ETN FNGS, Simplify Volt Pop Culture Disruption ETF VPOP, Invesco NASDAQ Internet ETF PNQI, John Hancock Multifactor Media and Communications ETF JHCS and Roundhill Streaming Services & Technology ETF SUBZ are in focus.
Earnings Whispers
Netflix has a Zacks Rank #3 (Hold) and an Earnings ESP of -3.47%. According to our methodology, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The online video streaming giant saw no earnings estimate revision over the past 30 days for the to-be-reported quarter. Netflix is expected to post earnings decline of 31% and solid revenue growth of 16% for the to-be-reported quarter. The company’s earnings surprise history is impressive as it delivered an earnings surprise of 7.67%, on average, over the past four quarters.
The stock belongs to a top-ranked Zacks industry (placed at the top 40% of 250+ industries) with an impressive Momentum Score of A (see: all the Technology ETFs here).
The Zacks Consensus Estimate for the average target price is $668.09, with nearly 77% of the analysts giving a Strong Buy or a Buy rating ahead of the company’s earnings.
What’s Hot?
Netflix is facing increased competition in the streaming landscape from the likes of Disney DIS, Apple AAPL and Amazon AMZN. The company expects to add 8.5 million new streaming subscribers in the fourth quarter supported by a flood of new content releases, with hits like Don't Look Up and The Witcher.
Netflix Inc (NASDAQ:NFLX). has raised the price of its monthly subscription packages by $1-$2 ahead of the earnings release. The move will help to boost revenues and increase the money it can spend on programming.
ETFs in Focus
MicroSectors FANG+ ETN (FNGS)
MicroSectors FANG+ ETN is linked to the performance of the NYSE FANG+ Index, which is an equal-dollar-weighted index, designed to provide exposure to a group of highly traded growth stocks of next-generation technology and tech-enabled companies. It holds 10 stocks in its basket in equal proportion, with Netflix share coming in at 10%.
MicroSectors FANG+ ETN has accumulated $77.8 million in its asset base and charges 58 bps in annual fees. It trades in a paltry volume of 23,000 shares a day on average and has a Zacks ETF Rank #3 (Hold) (read: ETFs to Drive Tesla (NASDAQ:TSLA)'s Near $1 Million Vehicle Deliveries).
Simplify Volt Pop Culture Disruption ETF (VPOP)
Simplify Volt Pop Culture Disruption ETF is an actively managed fund, providing investors concentrated exposure to media platform leaders across streaming, social and Internet of Things. Netflix takes the eighth spot at a 9.2% allocation.
Simplify Volt Pop Culture Disruption ETF has amassed $1 million in its asset base. The product has an expense ratio of 0.95%.
Invesco NASDAQ Internet ETF (PNQI)
Invesco NASDAQ Internet ETF follows the Nasdaq CTA Internet Index, which measures the performance of companies engaged in Internet-related businesses listed on the New York Stock Exchange, NYSE American, Cboe Exchange or The Nasdaq Stock Market. The product holds 82 stocks in its basket, with Netflix occupying the fourth position with 7.4% of assets (read: Internet ETFs Looking Great Bets Amid Omicron Uncertainty).
Invesco NASDAQ Internet ETF has amassed $833 million in its asset base and charges 60 bps in fees per year. The fund trades in a light volume of 32,000 shares and has a Zacks ETF Rank #3 (Hold) with a High risk outlook.
John Hancock Multifactor Media and Communications ETF (JHCS)
John Hancock Multifactor Media and Communications ETF targets a wide range of U.S. media and communication stocks to exploit the sector's opportunities by tracking the John Hancock Dimensional Media and Communications Index. It holds 55 stocks in its basket, with NFLX taking the third spot with a 6.9% share.
John Hancock Multifactor Media and Communications ETF has managed assets worth $18.8 million and charges 40 bps in annual fees. It trades in an average daily volume of about 1,000 shares.
Roundhill Streaming Services & Technology ETF (SUBZ)
Roundhill Streaming Services & Technology ETF debuted in February last year and has amassed $17.3 million in its asset base. It is actively managed and offers exposure to the streaming industry. The fund consists of companies from across the globe that are actively involved in the business of streaming.
Roundhill Streaming Services & Technology ETF holds 38 stocks in its basket, with Netflix occupying the third spot with a 4.9% share. SUBZ charges 75 bps in annual fees.
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Amazon.com, Inc. (NASDAQ:AMZN): Free Stock Analysis Report
Apple Inc. (NASDAQ:AAPL): Free Stock Analysis Report
Netflix, Inc. (NFLX): Free Stock Analysis Report
The Walt Disney Company (NYSE:DIS): Free Stock Analysis Report
Invesco NASDAQ Internet ETF (PNQI): ETF Research Reports
John Hancock Multifactor Media and Communications ETF (JHCS): ETF Research Reports
MicroSectors FANG ETN (FNGS): ETF Research Reports
Simplify Volt Pop Culture Disruption ETF (VPOP): ETF Research Reports
Roundhill Streaming Services & Technology ETF (SUBZ): ETF Research Reports
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