ETFs to Faucet Netflix’s Q1 Earnings Beat, Strong Progress Outlook

Netflix NFLX reported sturdy first-quarter 2025 outcomes after the closing bell on Tuesday. The world’s largest video-streaming firm outpaced earnings estimates however barely missed income estimates. It affords an upbeat outlook for the continued quarter and a number of other analysts raised the goal worth on the inventory, signaling bullish traits. As such, shares of Netflix jumped as a lot as 4.5% in after-market hours.

Buyers searching for to faucet this opportune second ought to put money into ETFs with the most important allocation to this streaming large. These funds embody MicroSectors FANG+ ETN FNGS, Invesco Subsequent Gen Media and Gaming ETF GGME, First Belief Dow Jones Web Index Fund FDN, FT Vest Dow Jones Web & Goal Earnings ETF FDND and Communication Companies Choose Sector SPDR Fund XLC.

Q1 Earnings in Element

The corporate reported earnings per share of $6.61, which strongly outpaced the Zacks Consensus Estimate of $5.69 and the year-ago earnings of $5.29. Revenues rose 13% yr over yr to $10.54 billion and had been barely beneath the consensus estimate of $10.55 billion. (Discover the newest EPS estimates and surprises on Zacks Earnings Calendar.)

Netflix not reviews quarterly subscriber numbers, following its technique of specializing in revenues and different monetary metrics as efficiency indicators. The corporate stays unscathed by the continued tariff chaos because the leisure trade exhibits its resilience in powerful financial occasions. Netflix’s low-cost advertising-supported service plan ought to give it extra resilience if the macroeconomic local weather worsens.

For the second quarter, Netflix expects revenues to develop 15% yr over yr to $11.04 billion, whereas earnings per share are anticipated to rise 44% to $7.03. The steering is above the Zacks Consensus Estimate of $10.96 billion for revenues and $6.22 for earnings per share.

The corporate launched its in-house advert tech platform on April 1, with worldwide enlargement starting this quarter. Administration expects promoting income progress to double in 2025, signaling confidence on this comparatively new enterprise phase. Netflix reaffirmed its full-year income steering of $43.5-$44.5 billion.

Robust Progress Outlook

Netflix goals to succeed in a market capitalization of $1 trillion by the tip of the last decade, a major leap from its present valuation of roughly $419.2 billion. The corporate plans to double its annual revenues from $39 billion to $80 billion, fueled by its burgeoning ad-supported subscription mannequin and worldwide market enlargement. Netflix additionally forecasts its world promoting revenues to develop to $9 billion by 2030.

Netflix’s progress technique consists of increasing its content material library, creating dwell programming choices, enhancing its gaming division and constructing its promoting enterprise.

With whole subscribers of greater than 300 million, the corporate goals to extend this subscriber base to roughly 410 million by 2030 by specializing in worldwide markets, comparable to India and Brazil, for a lot of this enlargement.

Analysts Increase Goal Value on Netflix

A number of analysts praised the corporate’s means to thrive amid financial uncertainty. Following the first-quarter earnings bulletins, analysts responded positively to Netflix’s outcomes. Guggenheim raised the goal worth on the inventory from $1,100 to $1,150, citing “stable” first-quarter outcomes and seeing a “lengthy runway for progress.” BMO Capital elevated the goal worth to $1,200, highlighting the “multi-year sturdy advert progress alternative” forward (learn: Bulls Chasing Netflix Ahead of Q1 Earnings: ETFs in Focus).

MoffettNathanson raised the value goal to $1,150 from $1,100 whereas Oppenheimer elevated it to $1,200 from $1,150. Pivotal Analysis raised the value goal to $1,350 from $1,250.

Even cautious analysts like Barclays lifted the goal worth on Netflix to $1,000, noting that the streaming large has change into a “defensive lengthy” funding within the present financial setting.

An analyst at Financial institution of America mentioned Netflix has “sustainable progress drivers” that would make it a robust defensive alternative in a harder macroeconomic setting. Jefferies analysts mentioned Netflix stays a “high choose” as the corporate rolls out its advert suite.

ETFs in Focus

MicroSectors FANG+ ETN (FNGS)

MicroSectors FANG+ ETN is linked to the efficiency of the NYSE FANG+ Index, which is an equal-dollar-weighted index. It’s designed to offer publicity to a gaggle of extremely traded progress shares of next-generation know-how and tech-enabled corporations. It holds 10 shares in its basket in equal proportion, with Netflix’s share coming in at 10% (learn: Should You Brace for Mag-7 ETFs Before It’s Too Late?).

MicroSectors FANG+ ETN has collected $363.5 million in its asset base and costs 58 bps in annual charges. It trades in a reasonable quantity of 137,000 shares a day on common and has a Zacks ETF Rank #3.

Invesco Subsequent Gen Media and Gaming ETF (GGME)

Invesco Subsequent Gen Media and Gaming ETF affords publicity to corporations with vital publicity to applied sciences or merchandise that contribute to future media by way of direct revenues. It tracks the STOXX World AC NexGen Media Index, holding 85 shares in its basket. Netflix is the highest agency, accounting for 9.2% of the GGME belongings.

Invesco Subsequent Gen Media and Gaming ETF has amassed $115.6 million in its asset base and costs 61 bps in annual charges. It trades in a mean each day quantity of 16,000 shares and has a Zacks ETF Rank #3.

First Belief Dow Jones Web Index Fund (FDN)

First Belief Dow Jones Web Index Fund follows the Dow Jones Web Composite Index, giving buyers publicity to the broad Web trade. It holds about 41 shares in its basket, with Netflix occupying the highest spot at 10.1%.

First Belief Dow Jones Web Index Fund is the preferred and liquid ETF within the broad know-how area, with AUM of $5.7 billion and a mean each day quantity of round 503,000 shares. FDN costs 51 bps in charges per yr and has a Zacks ETF Rank #1 (Robust Purchase) with a Excessive threat outlook.

FT Vest Dow Jones Web & Goal Earnings ETF (FDND)

FT Vest Dow Jones Web & Goal Earnings ETF is an actively managed fund that invests primarily in U.S. exchange-traded fairness securities meant to trace the Dow Jones Web Composite Index. It makes use of an “choice technique” consisting of writing (promoting) U.S. exchange-traded name choices on the Nasdaq-100 Index or ETFs that monitor the Nasdaq-100 Index. It holds 42 shares in its basket, with Netflix occupying the highest place at 10.1% share.

FT Vest Dow Jones Web & Goal Earnings ETF has collected $5.8 million in its asset base and trades in a mean each day quantity of about 6,000 shares. It costs 75 bps in annual charges.

Communication Companies Choose Sector SPDR Fund (XLC)

Communication Companies Choose Sector SPDR Fund affords publicity to corporations from telecommunication providers, media, leisure and interactive media & providers and has collected $18.9 billion in its asset base. It follows the Communication Companies Choose Sector Index and holds 23 shares in its basket, with Netflix occupying the fourth place at 6.9% share. About 31.5% of the portfolio is allotted to leisure and interactive media & providers every, whereas media spherical off the following spot with a 23% share (learn: Inside Trump Tariffs and Their Impact on Sector ETFs).

Communication Companies Choose Sector SPDR Fund costs 8 bps in annual charges and trades in a mean each day quantity of seven.1 million shares. It has a Zacks ETF Rank #1.