Giles Coghlan LLB, Lth, MA
Financial Source
Netflix earnings are due on January 19 and expectations have been rising that earnings will start to show a sharp drop in US companies. With a coming US recession seen as a base case for the market, there is still a chance that tech earnings surprise to the upside. Especially, if falling numbers are expected but there are some upside surprises, this could result in some relief rallies over the short to even medium term for some heavily sold tech stocks.
One stock that is worth looking at carefully is Netflix. This so-called ‘stay at home’ stock benefited from Covid stay at home orders as demand for its services rose. However, recent falling numbers have been a cause for concern. What will the latest earnings show on January 19?
Netflix’s seasonals are notable. Over the last 10 years from January 06 and February 28, the average return has been 14.91%. The maximum gain was an astounding 89.60%. So, there are large moves here seasonally to be aware of.
Major Trade Risks: The major trade risk here is that Netflix earnings disappoint and the stock drops further on a weaker outlook than the market was looking for.
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