Netflix Jumps 10% After Outperforming in Every Aspect in Q3 Earnings: 3 Reasons to Buy NFLX

Shares of Netflix inc. (NFLX) are heading into the weekend with a 10% gain after the streaming giant surpassed Wall Street’s expectations in just about every category for the third quarter.

Adding more than 5 million new customers fueled both the top and bottom lines, whereas the consensus estimate called for just 4.5 million new subscribers. Meanwhile, sales climbed 15% to $9.83 billion. Earnings came in at $5.40 per share.??

The company has been on a surge since deciding to crack down on password sharing and introducing its new budget-friendly ad-supported tier. Since 2022 the stock has gained roughly 200%, marking one of the more impressive turnarounds in recent memory.

This performance can be traced to the 60 million new subscribers added over the last two years. And while growth does look to be dwindling a bit, Netflix continues to deliver growth beyond what experts are forecasting.

Looking ahead to next year, the streaming business is aiming for sales growth of 11% to 13%, which could bring the tally as high as $44 billion. A balance between price hikes and continued subscriber growth will be necessary to achieve this goal.

But, advertising is expected to pull its weight as well, as it has been underperforming for some time. Co-CEO Greg Peters is looking for ad sales to double in the year ahead, thanks in part to the company’s own advertising technology it’s currently building out.

Netflix is also looking to start harnessing live programming as another way to grow the business - from live boxing matches to NFL games, and in the coming year, regular live wrestling.

Earlier this month we looked at some of the concerns surrounding Netflix from a growth perspective. At the time, NFLX was rated a buy in the VectorVest system and sat at just under $710/share. Today the stock is $757/share.

As the stock has now gained 57% this year and 116% in the past 1-year period, there are rumblings that NFLX is overvalued. But, we’ve taken another look in the VectorVest stock software and see 3 reasons it’s still a good time to buy NFLX.

NFLX Still Has Excellent Upside Potential and Safety With Very Good Timing

VectorVest is a proprietary stock rating system that tells you what to buy, when to buy it, and when to sell it, all in just 3 simple ratings. This saves you time and stress while helping you win more trades. The ratings are relative value (RV), relative safety (RS), and relative timing (RT).

Each sits on a scale of 0.00-2.00 with 1.00 being the average, making for effortless interpretation. Investors are even given a buy, sell, or hold recommendation based on the overall VST rating for any given stock at any given time. Here’s what we uncovered for NFLX:

• Excellent Upside Potential: The RV rating compares a stock’s long-term price appreciation potential (forecasted 3 years out), AAA corporate bond rates, and risk. This makes it a far better indicator than the typical comparison of price to value alone. NFLX still has an excellent RV rating of 1.47.
• Excellent Safety: The RS rating is a risk indicator. It’s derived from a deep analysis of the company’s financial consistency & predictability, debt-to-equity ratio, business longevity, sales volume, price volatility, and other factors. The RS rating of 1.42 is excellent for NFLX.
• Very Good Timing: The RT is based on the direction, dynamics, and magnitude of the stock’s price movement. It’s taken day over day, week over week, quarter over quarter, and year over year. The RT rating of 1.36 is very good for NFLX, reflecting the stock’s impressive performance in both the short and long term.

The overall VST rating of 1.41 is excellent for NFLX and enough to earn the stock a BUY recommendation in the VectorVest system still today.?

But before you make your next move, take a closer look at this free stock analysis and make sure you have all the insights you need for the most profitable, stress-free trade possible!

Want These Types of Insights at Your Fingertips so You Can Win More Trades?

Use VectorVest to Analyze any stock free. VectorVest is the only stock analysis tool and portfolio management system that analyzes, ranks and graphs over 18,000 stocks each day for value, safety, and timing and gives a clear buy, sell or hold rating on every stock, every day.

VectorVest advocates buying safe, undervalued stocks, rising in price. NFLX has gained another 10% today, continuing its torrent pace since 2022. This time the gain is fueled by an impressive earnings beat for Q3 along with upbeat guidance or the coming year. The stock itself has excellent upside potential and safety with very good timing.?

Before you invest, check VectorVest! Click here to ANALYZE ANY STOCK FREE and see our system in action.

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