Netflix Stock Soars After Q3 Earnings: What’s Driving NFLX’s Surge?

Summary:
• Netflix stock surged 16% post-Q3 earnings, driven by a 41% profit jump and 5.1 million new subscribers. Is NFLX approaching new highs?

Netflix (NASDAQ: NFLX) is making waves after its Q3 2024 earnings report, which saw profits jump by 41%, and the company added a solid 5.1 million subscribers. The stock has rallied sharply, surging by 16% in after-hours trading, breaking key resistance levels and putting it back in the spotlight.

Netflix Price Analysis

• Current Price: Netflix is now trading at $687.65, reflecting a 2.04% drop after touching highs of $704.41 earlier.
• Resistance Levels:
  • $733.24: This is the next key resistance level after the stock surged post-earnings. A breakout above this could signal further bullish momentum toward all-time highs.
  • $711.74: A crucial short-term resistance, where Netflix faced selling pressure after hitting this level post-earnings.
• Support Levels:
  • $661.21: A strong support level if the stock pulls back after its recent surge. This zone may act as a cushion in case of profit-taking.
  • $695.82: Another important level to watch, as it has shown signs of support after the stock’s recent rally.
• Technical Indicators:
  • Bollinger Bands show the stock moving towards the upper band, indicating possible overbought conditions. This could mean a temporary cooling-off before the next leg higher.
  • The RSI (Relative Strength Index) is hovering around 42.43, indicating that while the stock isn’t overbought, it’s starting to show signs of momentum cooling off after a steep climb.

Netflix outperformed in Q3 earnings by adding 5.1 million new subscribers, setting a optimistic tone for Q4. The company’s strict enforcement of password-sharing and their implementation of ad-supported plans have contributed to the growth of their business in a crowded streaming market. Furthermore, Netflix is projected to see an increase in revenue in 2025 due to the price increases for its Basic and Premium subscription tiers in important markets.

Despite the impressive figures, Netflix is encountering difficulties due to decreasing average revenue per user (ARPU) in certain areas, potentially hindering future expansion. Nevertheless, the company’s decision to profit from password-sharing and broaden its ad-supported model might alleviate these worries and boost sustained growth.

Conclusion: Netflix’s Next Chapter

After the latest rally, Netflix’s stock is on the edge of another breakout, with $733.24 as the next key resistance to watch. But if the stock pauses for a breather, expect support at $661.21 to hold strong. With solid Q3 numbers and growth strategies clicking into place, Netflix seems to be positioning itself for continued success—though investors should keep an eye on profit-taking and any signs of slowing momentum.

Want more insights on earnings reports? We’ve got breakdowns of other top stocks like Meta, JPMorgan, BlackRock, Exxon, Nio, S&P 500, Nvidia, and more on Investing Cube.