Netflix Stock Looking For Next Catalyst

Netflix (NFLX) stock has been treading water for the past three months, waiting for a catalyst. That could come in the form of its third-quarter earnings report on Oct. 21.

The internet television network also could get a lift from the fifth and final season of its smash-hit series “Stranger Things” next month.

Netflix stock has perked up lately, rising above its 50-day moving average line this week. It has rebounded from calls from U.S. conservative leaders to cancel the service over some controversial programming choices.

Netflix stock has been consolidating for the past 15 weeks with a buy point of 1,341.15, according to IBD MarketSurge charts. That buy point is also the stock’s all-time high, reached on June 30.

On the stock market today, Netflix stock dipped 0.9% to close at 1,220.08.

The Los Gatos, Calif.-based company will report its Q3 results in less than two weeks. Analysts polled by FactSet expect Netflix to earn $6.96 a share on revenue of $11.51 billion. That would translate to year-over-year growth of 29% in earnings and 17% in sales.

For the fourth quarter, Wall Street is modeling Netflix earnings of $5.43 a share, up 27%, on revenue of $11.89 billion, up 16%.

Netflix Stock Upgraded To Buy

On Monday, Seaport Research upgraded Netflix stock to buy from neutral. It also raised its price target to 1,385 from 1,230. The firm is bullish on growth of Netflix’s advertising-supported service.

However, on Tuesday, TD Cowen analyst John Blackledge trimmed his price target on Netflix stock to 1,425 from 1,450 but kept his buy rating.

On the programming front, the highly anticipated release of “Stranger Things” season five has been split into three parts. The four-episode first volume will premiere on Nov. 26, followed by the three-episode second volume on Dec. 25 and the finale on Dec. 31.

“We expect a strong Q4 TV and film slate, including global hit ‘Stranger Things’ (S5) and a plethora of high-profile films, to drive strong member trends into year end,” Blackledge said in a client note.

Meanwhile, on Wednesday, Netflix announced that it is bringing video games to television screens for the first time. To date, Netflix has only offered games on mobile devices.

The company announced several party games coming to TVs this holiday season, including “Boggle Party” and “Pictionary: Game Night.” Players will use their smartphones as controllers.

Netflix stock has an IBD Composite Rating of 95 out of 99, according to IBD Stock Checkup. The Composite Rating scores a stock’s key growth metrics against all other stocks regardless of industry group.

Follow Patrick Seitz on X at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.