Netflix Earnings: Options Signal Bearish Tilt, But a Beat Could Flip the Script

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Earnings: Options Signal Bearish Tilt, But a Beat Could Flip the Script

Key Highlights:

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  (NASDAQ:) is set to report its Q4 2024 earnings on Tuesday, January 21, 2025, at 4 PM ET.
• Key focus areas for the report include subscriber growth, revenue changes, content performance (especially following the return of popular series like “Squid Game”), and any updates on future content strategies.
• Investors will assess how the NFL games, a successful Jake Paul vs. Mike Tyson” boxing match and the halftime show by Beyoncé impacted viewership and subscriber numbers.
• The fair value average is at $730.20 based on “Investing Pro 12 Models”.
• Analyst targets (42 analysts) = $873.81.
• 52 Weeks Market Range = 47

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Notably, the company has achieved 35 earnings beats since Q2 2012, with just 10 misses since Q3 2015.

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Financial Health History

Financial Health for

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is determined by ranking the company on over 100 factors against companies in the Communication Services sector and operating in Developed economic markets.

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Option Statistics Show Bearish Tilt

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The put/Call ratio for the Jan 24 expiry is 1.3142% more puts than calls which suggests the following three scenarios:

• With a Put/Call ratio between 1.9507 to 1.1396 for the next four upcoming expiries suggests that the traders are extremely bearish.
• Earning miss or lower guidance could trigger a sell-off as anticipated by the option market.
• Earning and guidance in line with or better than estimates would trigger a sharp rally.

Technical Analysis Perspective:

• NFLX weekly and monthly charts have two significant technical patterns.
• Prices formed a large rounding formation pattern between Nov 2012 to Sept. 2024 and penetrated 700/701 (all-time high during the *******) to record 941.75 in the week of Dec 09, 2024.
• Most of the time prices come back to retest the breakout of the previous high after rising for a while, which could still be on the cards.
• The stock has been hovering inside a large bullish channel since June 2022. The mid-point of the formation is at 881.50 this week, rising about 14 to 15 dollars a week.
• There is a likelihood that NFLX may hit between 890 – 925 pre or post-earnings and reject this level to initiate a retest of 700/701 (previous high) at some point in the coming months.

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Rounding and Rising Channel Pattern:

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NFLX Seasonality Chart:

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• NFLX closes 15.10% lower higher in January 70% of the time since 2006.

Conclusion

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has the upside room to hit 890 to 925 to retest Dec 2024 highs before heading lower.

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#

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#Earnings #Options #Signal #Bearish #Tilt #Beat #Flip #Script

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