Wednesday's IBD 50 Stocks To Watch pick, streaming giant Netflix, is in buy range from its latest entry following a recent breakout to new highs. That makes Netflix stock one of the best to watch right now. Shares rallied nearly 2% midday Wednesday.
Netflix stock dived after the company reported quarterly numbers on April 18. The company crushed Q1 targets but missed views with its sales outlook, sending shares down more than 9%. The stock has recovered impressively since then.
Netflix added 9.33 million subscribers in the March quarter, flying past consensus estimates of 5.48 million new subscribers. It ended the first quarter with 269.6 million total subscribers around the globe.
Earnings rose 83% over the prior-year quarter to $5.28 a share. For its next report in July, Wall Street forecasts a 39% EPS increase to $4.81 per share. For the full year, Netflix is expected to deliver 55% earnings growth to $18.65 a share, followed by a 21% gain in 2025.
On Tuesday, Evercore ISI analyst Mark Mahaney reiterated his outperform rating on Netflix stock and upped his price target to 700 from 650.
"Netflix is in the strongest position financially, fundamentally and competitively that we have ever seen," Mahaney said in a note to clients. "And we see with live events and gaming two very promising long-term greenfield revenue opportunities. And of course, 'Squid Games 2' is coming soon!"
Netflix stock is on two IBD lists: IBD 50 and Big Cap 20. Plus it is on the IBD Breakout Stocks Index, which is the basis for the Innovator IBD Breakout Opportunities ETF.
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Netflix Stock In A Buy Zone
Netflix stock is in buy range past a 639 buy point of a cup base, according to IBD MarketSurge chart analysis. The 5% buy zone tops out at 670.95, so shares are squarely in the buy zone.
With IBD's recommended equity exposure range at 60%-80%, investors have the flexibility to raise and lower exposure.
Netflix stock boasts a perfect 99 IBD Composite Rating, according to IBD Stock Checkup.
The relative strength line is at a new high. That's a bullish signal for Netflix stock and it reiterates the streaming giant as a stock market leader.
However, the most recent formation was a late-stage base. Such bases are more prone to failure than earlier ones. Also, they tend to offer less upside potential than first- and second-stage patterns.
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Best Stocks To Watch
Three recent IBD 50 Growth Stocks To Watch picks are among the best stocks to watch.
| Company | Symbol | Buy point | Type of base |
|---|---|---|---|
| Texas Roadhouse | 157.12 | Flat base | |
| PDD Holdings | 142.32 | Cup with handle | |
| Interactive Brokers | 112.50 | Tight area |
Source: IBD Data As Of May 21, 2024
Follow Scott Lehtonen on X, formerly known as Twitter, at @IBD_SLehtonen for more on the best stocks to buy and watch and the stock market.
