Another Positive Reaction To Netflix Earnings?

Netflix (NFLX) is expected to report earnings today after market close. The whisper number is $0.63, one cent behind the analysts' estimates and showing no confidence from the WhisperNumber community. Whispers range from a low of $0.59 to a high of $0.68.

A year ago the company reported earnings of $0.40, in-line with the whisper number. Netflix has a 63% positive surprise history (having topped the whisper in 22 of the 35 earnings reports for which we have data).

Earnings history:

  •  Beat whisper: 22 qtrs
  •  Met whisper: 3 qtrs
  •  Missed whisper: 10 qtrs

Our primary focus is on post earnings price movement. Knowing how likely a stock's price will move following an earnings report can help you determine the best action to take (long or short). In other words, we analyze what happens when the company beats or misses the whisper number expectation.

The table below indicates the average post earnings price movement within a one and thirty trading day timeframe:

The strongest price movement of +0.9% comes within ten trading days when the company reports earnings that beat the whisper number, and +4.7% within thirty trading days when the company reports earnings that miss the whisper number. The overall average post earnings price move is 'positive' (beat the whisper number and see strength, miss and see strength) when the company reports earnings.

The table below indicates the most recent earnings reports and short-term price reaction:

The company has reported earnings ahead of the whisper number in none of the past four quarters with a whisper number. In the comparable quarter last year the company reported earnings in-line with the whisper number. Following that report the stock realized a 2.7% loss in one trading day. Last quarter the company reported earnings three cents short of the whisper number. Following that report the stock realized an 11.6% gain in five trading days. Overall historical data indicates the company to be (on average within thirty trading days) a 'positive' price reactor when the company reports earnings.

Enter your expectation and view more earnings information here, or let us know your expectation in the comments section below. 

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not ...

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