Traders Expect a Big Netflix Stock Move After Earnings—Here’s How Much
Key Takeaways
Netflix (
NFLX
) is
slated to report
first-quarter results after markets close Thursday, and options markets suggest traders are expecting a big stock price move in the following days.
Netflix
options
pricing on Wednesday signaled the stock is expected to move approximately 8.5% in either direction in the week after Thursday’s report, suggesting a stock-price range of between $893.47 and $1,059.09. (U.S. financial markets are
closed on Friday
, which means any big move in the stock won’t happen until next week.)
Uncertainty is high heading into
Netflix
’s report, and that uneasiness is reflected in options prices for nearly all stocks. “The market is pricing in the highest average implied moves since 1Q20,” wrote JPMorgan analysts in a note on Monday. By their calculations, the average implied
earnings
-day move for the stocks they cover is 8.1% this quarter, compared with a realized average of 6.5% last quarter and 5.9% over the last three years.
In the same note, JPMorgan compared the historical post-earnings moves of the 60
largest S&P 500 stocks
and their implied volatility this quarter. They found Netflix was among the stocks with the most underestimated—or “cheapest”—post-earnings
volatility
. Over the past three years, the stock’s post-earnings move has averaged about 11%, making it and Meta Platforms (
META
) the most volatile names in JPMorgan’s sample.
Netflix’s “cheap” implied volatility puts it in the minority. Traders are pricing in smaller-than-average moves for only nine of the 60 largest stocks in the S&P 500, according to JPMorgan’s analysis. Tech giants Nvidia (
NVDA
), Meta, Broadcom (
AVGO
) and Oracle (
ORCL
) are among those nine.
Netflix Stock Has Momentum Heading Into Earnings
Netflix stock has jumped following each of its last two earnings reports. Shares advanced nearly 10% the day after fourth-quarter earnings
topped estimates
in January. The company also raised its revenue
forecast
for 2025 and boosted its share buyback program by $15 billion. In October of last year, Netflix
beat expectations
for its
top and bottom lines
, and indicated strong demand for its ad-supported subscription tier, sending shares soaring more than 11% the next day.
Netflix stock popped on Tuesday after a report that the streaming giant is
aiming to double its revenue
to about $78 billion by 2030, an ambitious goal that the company hopes will propel it into the $1 trillion market-capitalization club alongside tech giants like Alphabet (
GOOG
) and Amazon (
AMZN
).
Analysts
are generally bullish
on Netflix stock heading into earnings. Oppenheimer on Monday stuck by its “buy” rating and $1,150 price target—among the highest on Wall Street—and expressed confidence the streamer will be mostly insulated from tariffs and an economic slowdown.
Netflix shares fell 1.5% on Wednesday amid a broad
sell-off
. Even with the decline, the company’s shares are up about 8% so far this year and have risen 56% over the past 12 months.
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