IBD Stock Of The Day: Netflix Tests Key Level Ahead Of Q4 Earnings

Netflix (NFLX) is the IBD Stock of the Day for Tuesday. Shares of the video streaming platform are finding support above their 10-week moving average after a slight downtrend.

Netflix stock rallied more than 80% last year, helped by accelerating sales growth and strong earnings results. The company reported strong viewership numbers for its Christmas Day NFL games, which included a halftime show by Beyonce.

↑ X NOW PLAYING This Is How A New President Will Impact Fed Rate Cuts In 2025

On the stock market today, Netflix stock shed a fraction to 875.24 in midday trades.

With a slight downtrend to close 2024 from a Dec. 11 record high of 941.75, Netflix stock has formed a three-weeks-tight pattern, according to MarketSurge. The stock is trending toward forming a flat base by next week. In the meantime, a bounce up from Netflix stock's 50-day moving average could offer an entry.

Netflix Q4 Earnings Preview

With its Christmas Day debut for NFL broadcasting in the rearview, investors' attention is shifting toward the upcoming Q4 report for Netflix stock. The streaming giant will report results on Jan. 21.

Analysts on average expect Netflix's earnings to increase 99% year-over-year to $4.21 per share, according to FactSet. Sales are projected to rise 15% to $10.1 billion.

In a note to clients Tuesday, Evercore ISI analyst Mark Mahaney said he expects Netflix to beat expectations for sales and earnings while meeting expectations for its sales outlook.

"While we expect incremental negative FX impact to revenue vs. our assumptions at the time of Netflix's Q3 earnings report on Oct. 17, we continue to view the Street's Q4 Revenue, Operating Margin (21.9%) and earnings-per-share estimates as likely reasonable," Mahaney wrote.

Mahaney and Evercore rate Netflix stock as outperform. In a survey the firm published in December, Evercore found that 58% of Americans said they had watched a movie or show on Netflix in the past year. That topped 54% for Amazon Prime, 44% for Hulu, 40% for YouTube and 28% for HBO Max.

Another factor to watch in 2025 for Netflix is its broader push into live sports. In addition to the NFL games, Netflix recently secured the exclusive U.S. rights to broadcast FIFA's Women's World Cup in 2027 and 2031.

"The notion of more major sports migrating over time to streaming was bolstered by Netflix's solid performance on Christmas Day streaming two NFL games," Rosenblatt Securities analyst Barton Crockett said in a report following the games.

Crockett rates Netflix stock as neutral with a price target of 680.

Walt Disney Co. (DIS) and sports streaming provider FuboTV struck a deal yesterday, potentially bolstering a competitor.

Netflix Stock On Big Cap 20

Meanwhile, Netflix stock is a recent additions to the IBD Big Cap 20 list.

Netflix stock holds a best-possible Composite Rating of 99, according to IBD Stock Checkup. IBD's Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks typically have a Composite Rating of 90 or better.

YOU MAY ALSO LIKE:

Zuckerberg Bets Big On AI Smart Glasses. But Can Meta Outfox Apple And Google?

IBD Live: Learn And Analyze Growth Stocks With The Pros

Get Timely Buy & Sell Alerts With IBD Leaderboard

Top Growth Stocks To Buy And Watch

Learn How To Time The Market With IBD's ETF Market Strategy