Netflix Q1 Earnings Preview: Wall Street Expects Solid Results, Sees Stock as Safe Haven Amid Potential Economic Downturn
Todd Spangler
5 min read
Netflix, which financial analysts have crowned the undisputed subscription-streaming leader, kicks off the media and entertainment sector’s Q1 earnings this week. Wall Street anticipates that Netflix will report strong results for the period — the first quarter it will no longer disclose subscriber counts — and that the company is relatively well positioned to withstand economic headwinds.
Netflix is scheduled to report Q1 2025 results Thursday, April 17, after market close. Wall Street consensus estimates are for quarterly revenue to come in at $10.51 billion (up 12% year over year) with earnings per share of $5.66 (up 7%), according to LSEG Data & Analytics. That’s slightly above the company’s previous guidance for revenue of $10.42 billion and EPS of $5.58.
“Given macro volatility, we view Netflix as arguably the most defensive stock in our coverage universe amid any broader slowdown,” TD Cowen analysts led by John Blackledge said in an April 8 research note.
For starters, Netflix will not face any significant direct impact from the Trump administration’s tariffs. The TD Cowen analysts also cited “robust underlying biz demand from increasingly global content slate,” Netflix’s strong value proposition especially relative to out-of-home entertainment options, and continued “secular adoption of streaming video.” TD Cowen has a “buy” rating on Netflix with a 12-month price target of $1,150/share.
So far in 2025, Netflix shares have outperformed the broader market: The stock is up more than 7% year to date, compared with a decline of more than 10% for the S&P 500 index amid President Trump’s tariff announcements and escalating trade war with China.
Seaport Research Partners equity analyst David Joyce similarly noted that Netflix is “one of the cheapest forms of entertainment on a per-hour engagement basis.
“Generally speaking, what makes NFLX (and other streamers, of course) a defensive stay-cation alternative if we enter a recession is that it is likely to be one of the last expenditures cut from a consumer’s budget,” Joyce wrote in an April 14 note. The monthly price of Netflix premium service in the U.S. costs as much as “a single Imax ticket in major markets for 2 hours, or one-fifth of the average price of a single Live Nation ticket for a 2-hour event — not to mention comparing to pro sports events or theme parks,” he added. Joyce rates Netflix a “buy” with a $1,025/share 12-month price target.
As Netflix announced last year, beginning with the first quarter of 2025 it will stop reporting paid subscriber numbers and average revenue per member (ARM) on a regular quarterly basis, saying those aren’t as meaningful as user engagement or financial metrics like revenue and operating margin. (Netflix says it “will continue to announce paid memberships as we cross key milestones.”) For Q4 of 2024, Netflix reported 18.9 million net new global subscribers — around twice analyst expectations — to reach 301.6 million at year-end.
With the decision to no longer report subscriber figures, “Netflix is now free to focus solely on revenue growth,” Wedbush Securities analyst Alicia Reese wrote in an April 11 note. The company in January implemented price hikes across all tiers in the U.S. and other countries; even if that results in subscriber cancellations Netflix can “obscure subscriber churn and trade-downs while showing meaningful revenue growth.”
In the absence of subscriber figures, TD Cowen’s Blackledge expects investors to look for updates around Netflix’s “burgeoning ad tier.” Netflix plans to launch first-party advertising tech stack in the U.S. in April after rolling it out in Canada, and “we’ll look for color around potential timing of the remaining 10 ad markets later in 2025,” Blackledge wrote.
Netflix earlier this year raised its 2025 outlook for revenue to be between $43.5 billion and $44.5 billion (up $500 million from its prior forecast) and for operating margin to be 29%, up one percentage point from its previous guidance. With $18 billion in content spending forecast for 2025, “there is meaningful upside potential to Netflix’s 2025 guidance,” Wedbush’s Reese wrote.
For 2025, the company has touted the return of three of its biggest TV shows — “Squid Game,” “Wednesday” and “Stranger Things” — and said it plans to “grow into new areas like live programming and games.” Of note, Netflix began streaming WWE “Monday Night Raw” exclusively in the U.S., Canada, the U.K. and Latin America on a weekly basis in January 2025. It also will reprise its NFL double-header on Christmas Day 2025.
“Netflix is positioned to accelerate ad-tier revenue contribution for the next several years by adding more live events, improving its advertising solutions and targeting, and broadening its content strategy,” Reese wrote. The analyst maintains an “outperform” rating on Netflix with a $1,150/share 12-month price target, reflecting a P/E multiple of 34X on Wedbush’s 2027 EPS estimate.
Meanwhile, according to TD Cowen’s monthly survey of 2,500 U.S. consumers, Netflix continues to be the most popular way to watch video content in the living room. Asked which platform consumers use most often to view video content on their TV, Netflix retained the top spot in February 2025 with 25% of respondents, followed by YouTube (15%) and basic cable (10%). “We think Netflix’s broad catalog across multiple genres creates a durable advantage over time,” Blackledge wrote.
