Netflix stock is trending sideways ahead of the internet television network's second-quarter earnings report late Thursday. Wall Street analysts expect a positive report but have concerns.
Guggenheim Securities analyst Michael Morris on Wednesday reiterated his buy rating on Netflix stock and raised his 12-month price target to 1,400 from 1,150. But he said the Netflix story has gotten more complicated.
"What was once a simple long-term growth equation driven primarily by membership trajectory has now become a more complex calculation influenced by infrequently and unreported assumptions," Morris said in a client note. Those assumptions include "hours of engagement, advertising sales, and the no-longer-disclosed subscriber levels, as well as an increasingly diverse slate of content investment (now including sports, live, and potentially short-form)."
He added, "Available data has not reflected engagement growth consistent with the broader market enthusiasm for shares."
Further, Netflix's domestic viewership share slipped in first half of 2025, based on Nielsen data, Morris said. That was likely due to a "lighter content slate" in the period, he said.
Popular Netflix programming in the second quarter included TV series "Ginny & Georgia," "Dept. Q," "The Four Seasons," "Sirens" and "Squid Game." Hit movies included "Havoc," "The Life List," "Nonnas" and "Fear Street: Prom Queen."
On the stock market today, Netflix stock slid 0.8% to close at 1,250.31.
Netflix Stock Is A Recent Breakout
Netflix stock hit a record high of 1,341.15 on June 30. That followed its April 21 breakout from a double-bottom base at a buy point of 998.70, according to IBD MarketSurge charts. It is now trading just above the 20%-to-25% profit-taking zone, based on IBD trading principles.
Analysts expect the subscription streaming video leader to earn $7.08 a share, up 45% year over year, on sales of $11.06 billion, up 15.7%, in the second quarter.
Key focus areas for the Q2 report will be the company's progress in scaling its advertising-supported service tier and growing its international business.
Analysts also will be curious to learn more about Netflix's live programming initiatives, including sports and its deal to carry the TF1 channels in France.
On Tuesday, Loop Capital maintained its hold rating on Netflix stock but raised its price target to 1,150 from 1,000.
"We remain quite bullish on Netflix the company, but remain neutral on the stock due to valuation with the stock trading at almost 50x earnings," Loop analyst Alan Gould said in a client note.
Netflix stock is on three IBD lists: IBD 50, Leaderboard and Big Cap 20.
Follow Patrick Seitz on X at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
