Netflix (NFLX) Reports Next Week: Wall Street Expects Earnings Growth

Wall Street expects a year-over-year increase in earnings on higher revenues when Netflix (NFLX) reports results for the quarter ended June 2020. While this widely-known consensus outlook is important in gauging the company's earnings picture; a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.

The stock might move higher if these key numbers top expectations in the upcoming earnings report; which is expected to be released on July 16. On the other hand; if they miss the stock may move lower.

While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations; it's worth having a handicapping insight into the odds of a positive EPS surprise.

This internet video service is expected to post quarterly earnings of $1.83 per share in its upcoming report; which represents a year-over-year change of +205%.

Revenues are expected to be $6.07 billion; up 23.4% from the year-ago quarter.

Wall Street Expects Earnings Growth

The consensus EPS estimate for the quarter has been revised 0.44% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.

Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts.

Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. This insight is at the core of our proprietary surprise prediction model - the Zacks Earnings ESP (Expected Surprise Prediction).

The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information; which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.

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