Last Thursday, a streaming service giant Netflix (Nasdaq: NFLX) He reported solid results from the first quarter, which pushed the shares over $ 1,000 in hours. The street probably loved the huge one closest and the management’s decision to confirm its year-round perspective on strong growth of the best lines and improve its operating margin.
“We have been fulfilling our priorities since 2025,” Netflix said in his first quarter letter. These priorities include improving its content, expanding its advertising business, misleading more growth initiatives, such as live and game programming, and ultimately stimulate stable revenue and profit growth.
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For investors who were on the sidelines entering the report, is it too late to buy shares? This is a timely question, since, although the shares are from the last low levels, it is still well below its high than $ 1.064.50, reached earlier this year. The shares of the streaming specialist is attractive at a price of about $ 1,000?
Netflix shocked investors in the last quarter, when it reported an annual rate of revenue growth of a year of 16% for the period. Even more impressive was his $ 4.27-dollar ratio of $ 2.11 in the previous quarter. However, many investors were probably skeptical that such a strong impulse could continue. In fact, the company is guided by a noticeable slowdown in revenue growth in the first quarter of 2025. CONDUCTIONALLY, the management said it expects the revenue to increase by 11.2% compared to the year.
Still, we are here with another quarter of surprising growth. The company’s largest line increased by 12.5% compared to a year to more than $ 10.5 billion, a slower, but still an impressive growth rate compared to the previous quarter.
More importantly, however, Netflix’s operating margin was 31.7%, compared to 28.1% in the previous year. This made a $ 6.61 profit, compared to $ 5.28 in the same quarter of last year. The management pointed to the subscription higher than the crosses that advertising revenue as the main reason for the superiority of its expectations at the beginning of the quarter.
But we didn’t even get to the best part. The most juicy figures are the leadership of the leadership for its second quarter of 2025. The company said it expects the second quarter revenue to increase at an even faster rate than in the first quarter of 2025. In particular, the management heads to revenue to increase by 15.4% in the year to more than $ 11 billion. To make this figure even more impressive, the revenue forecasts from the second quarter of Netflix are calling for the highest year of the highest year of permanent currency.
Oh, and one more thing: the streaming company is heading for its operating margin for the second quarter of 33.3%-more than 6 Percentage points higher than the previous year. The optimism of the management is supported by the fact that the company is expected to see “the full benefit of the latest prices”, as well as further growth of subscribers and advertising revenue, explained the management in the company’s letter for the first quarter of shareholders when discussing its prospects for the second quarter.
With such strong foundations, it can be tempting to buy the action after Netflix’s worst report. But exercising some caution can be a good idea. Shares are far from cheap. Based on the most up-to-date data of the company at a 12-month profit per share, the shares are still traded at a price to profit, multiple in the high 40s. Assessment as these prices not only in strong growth in 2025, but also exceptional lower line results for years to come.
Of course, the history of growth of Netflix and its continuous implementation of key growth initiatives, such as live advertising and programming, suggest that the company is likely to continue to grow with impressive prices for years to come. But investors may want to consider leaving room for a mistake when buying individual shares. In other words, investors should strive to buy shares when they look undervalued – they are not quite valued. After all, no one knows for sure what the future has, so it is best to plan some unexpected deviations.
As for what this last report means for those who already own stocks, this is nothing but good news. Although the shares may not be cheap enough to create an attractive entry point today, they are not so expensive that Netflix shareholders have to sell. These latest results confirm the long -term case of a shareholder bull.
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Daniel Sparks and his clients have no position in any of the mentioned shares. Motley Fool has positions and recommends Netflix. Motley Fool has a policy of disclosure.
Netflix’s revenue looks good: it’s time to buy the action while the shares are still reduced by the last maximums? Originally published by Motley Fool
