Netflix, Inc. Beat Analyst Estimates: See What The Consensus Is Forecasting For Next Year
Netflix, Inc. (NASDAQ:NFLX) shareholders are probably feeling a little disappointed, since its shares fell 7.7% to US$67.05 in the week after its latest quarterly results. Netflix reported US$13b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$0.87 beat expectations, being 5.8% higher than what the analysts expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Following the latest results, Netflix's 45 analysts are now forecasting revenues of US$56.6b in 2027. This would be a solid 14% improvement in revenue compared to the last 12 months. Per-share earnings are expected to increase 6.2% to US$3.77. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$57.0b and earnings per share (EPS) of US$3.80 in 2027. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
View our latest analysis for Netflix
The consensus price target fell 7.9% to US$84.83, suggesting that the analysts might have been a bit enthusiastic in their previous valuation - or they were expecting the company to provide stronger guidance in the quarterly results. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Netflix, with the most bullish analyst valuing it at US$126 and the most bearish at US$57.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The period to the end of 2027 brings more of the same, according to the analysts, with revenue forecast to display 11% growth on an annualised basis. That is in line with its 11% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 8.6% annually. So although Netflix is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that in mind, we wouldn't be too quick to come to a conclusion on Netflix. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Netflix going out to 2028, and you can see them free on our platform here..
It is also worth noting that we have found 1 warning sign for Netflix that you need to take into consideration.
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