Netflix is anticipated to deliver impressive results for the third quarter, with expectations of announcing price increases soon, as noted by Oppenheimer in a recent analysis. The streaming service's share of minutes viewed in the Nielsen Top-10 for streaming television has soared to 66% for the third quarter ending September 1.
This marks the highest rating since the second quarter of 2023, up from 54% in the prior quarter, as highlighted by Oppenheimer's report. Continuing their analysis, Oppenheimer projects a revenue generation of $9.8 billion alongside GAAP earnings per share (EPS) of $5.10 for Q3. This translates to notable year-over-year growth from last year's figures of $8.5 billion and $3.73 EPS.
Analysts from Capital IQ are aligning closely with these projections, estimating revenue at $9.76 billion and an EPS of $5.09. Netflix is on track to disclose its performance metrics for this period on October 17. A significant point of interest is Netflix's recent decision to implement premium-tier price increases in the US, UK, and France last October.
Oppenheimer believes that additional price hikes for various international regions may follow suit this month, alongside a critical raise in standard pricing estimated between 8% to 15%. Notably, only 40% of these anticipated price hikes have been incorporated into consensus estimates, as articulated in a research report by a consortium of analysts including Jason Helfstein.
They reiterated an outperform rating while adjusting their price target for Netflix shares from $725 to $775. The analysts also noted that Netflix has refrained from adjusting standard pricing since January 2022, highlighting a considerable waiting period for subscribers. Despite the forthcoming price increases, upcoming content releases are projected to mitigate churn rates, easing the transition for subscribers, according to the analysts' perspective.
With this in mind, Oppenheimer has revised its revenue forecast for the fourth quarter to $10.2 billion, an increase from their previous estimate of $10 billion, alongside an EPS target adjustment from $3.92 to $4.05. Furthermore, the brokerage has revised its estimates for the financial outlook in 2024. Reflecting the anticipated price changes in their updated model, Oppenheimer has adjusted its average revenue per membership for 2025 upward by 2%, now estimated at $12.65—surpassing the consensus prediction of $12.40.
They have also raised their revenue target for Netflix to $45.3 billion, up from a previous estimate of $44.4 billion, representing a 4% increase over the Street's expectations. Stock Price: $731.89, Change: +4.46, Percent Change: +0.61.