Netflix Stock Soars on Q3 Earnings Beat and Wall Street Upgrade: What’s Next For the Streaming Giant?

Netflix (NASDAQ: NFLX) stock skyrocketed 14% after the closing bell on Tuesday in response to the company’s Q3 2022 earnings, which saw the streaming giant beat analyst expectations for revenue and earnings per share.

With analysts’ consensus estimates projecting Netflix would report revenue of $7.84 billion and EPS of $2.13 per share, the company surprised the market when it announced Q3 revenue and EPS came in at $7.93 billion and $3.10, respectively. Netflix also reported it added 2.41 million subscribers during the third quarter, more than double its forecast from Q2 2022.

Netflix stock is skyrocketing on Wednesday morning as the rest of the stock market crumbles. If you’re an avid investor, you’ll want to stick around until the end of this article for all the juicy details on Netflix and exactly why they’re soaring midweek.

With previous negative sentiment, Netflix shaved off almost 80% from its previous all-time highs from 2021 into 2022 this year. Many thought the company could become the next Blockbuster. However, the company’s streaming service initiatives and innovative practices do not.

Netflix is continuously implementing new practices, starting with its latest ad program. Although users might not be fond of the initial idea of the ad program, it may be their largest money maker yet and here’s why. Now, Netflix is partnering with Microsoft to roll out its new ad tier. What does that mean? Simply put, it’s a new, affordable viewing option for users. Netflix will do it by showing advertisements. Initially, the concept has shown to be controversial with investor skepticism, as the entire point of the paid version of Netflix was to have an ad-free experience. However, from a marketing standpoint, this allows the streaming giant to scale even further.

The proof is in the pudding. In this sense, they’re crushing expectations despite their stock sinking into 2022. Their growing subscription count backs this up, adding 2.41 million net subscribers and smashing through third-quarter forecasts with anticipated growth into Q4. With revenue approaching nearly $8 billion, the company is proving they’re still a force to be reckoned with, and investors are profiting with NFLX up 14% Wednesday morning on the trading day.

Wall Street claims it might be time to buy Netflix. However, according to Warren Buffett, it’s important to “be fearful when others are greedy, and greedy when others are fearful.” Therefore, companies with strong fundamentals and a high intrinsic value will always be valuable companies to own, regardless of a missed earnings report or weak overall market sentiment.

Read Next: The End of an Era is Here For Netflix

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Disclaimer: Wealthy VC does not hold a position in any of the stocks, ETFs or cryptocurrencies mentioned in this article.