Netflix stock, along with Robinhood Markets, headline Wednesday's IBD Screen Of The Day, a column that focuses on top ideas in the IBD Stock Screener.
Wednesday's stock picks come from the Relative Strength Line New Highs screen. This screen identifies top-growth stocks with RS lines that are making new highs, a sign of big stock market outperformance in the stock market uptrend. Strong RS lines are hallmarks of previous stock market winners.
Other notable stocks on the screen include NetApp.
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Netflix Stock Breaks Out
Streaming giant Netflix is breaking out past a new buy point in a cup base. Shares are above the 639 entry following this week's solid gains, but they dropped 1.6% Wednesday.
Shares of Netflix 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 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.
Netflix earns a spot on the IBD 50, and has also secured placement on the IBD Breakout Stocks Index, which gets updated weekly.
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Robinhood And NetApp
On Friday, online trading platform Robinhood surged more than 12% after BofA Securities upgraded the stock, saying retail investors are becoming more active. BofA analysts raised the stock from underperform to buy, with a new price target of 24, up from 14. Shares finished that day just shy of their 20.55 cup-base entry.
Robinhood stock broke out past that buy trigger on Monday, closing in the 5% buy area that tops out at 21.58. But shares gave up that entry during Wednesday's 6.1% slide. Wait for a move back above the key level before considering to purchase shares.
In the company's May 8 first-quarter report, the online trading platform reported earnings and sales that crushed Wall Street's estimates due to a surge in retail cryptocurrency trading. Robinhood earned 18 cents a share, a big shift from a year-ago loss. Revenue surged 40% year over year, to a record $618 million.
NetApp is in buy range past a double-bottom's 108.82 buy point following a May 8 breakout. Shares climbed another 1% Wednesday, extending their win streak to four sessions.
In late February, NetApp reported a 42% increase in adjusted earnings to $1.94 per share on 5% revenue growth to $1.61 billion. FactSet analysts expected earnings of $1.69 per share on $1.59 billion in revenue. The results marked the second straight quarter of accelerating earnings growth.
NetApp will report its fiscal-fourth quarter results on May 30. That increases the risk of the latest breakout, but there is a growing profit cushion ahead of that report.
Follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on Netflix stock, other best stocks to buy and watch and the Dow Jones Industrial Average.
