Visible Alpha Technology

Netflix Inc. (NASDAQ: NFLX) will report Q4 2024 results on Tuesday, January 21, 2025. Here are the key numbers that we’re watching.

Netflix – Consensus Expectations for Q4, Past Earnings Surprises, Revisions, and CAGR

Netflix Q4 2024 Earnings Preview and Outlook

Q4 2024 expectations: Revenues are expected to be supported by the continued paid-sharing, growth of the ads business, and further monetization. While Q3 showed positive trends, questions remain around the investments in the ad tier, increased competition, and its impact on paid sharing.

According to Visible Alpha consensus, the 21.9% margin is expected to be driven by total revenues of $10.1 billion and operating income of $2.2 billion in Q4 2024, up from 16.9% in Q4 2023. These estimates have not changed much since last quarter, and are driven by consistent expectations for U.S. streaming and an uptick ad-supported revenue. It is worth highlighting that since the July quarter, ad-supported revenue has moved back up to $746 million, but is still slightly lower than the initial $788 million revenue expectation at the beginning of FY 2024. In addition, earnings estimates have moved up from $3.87/share to now $4.23/share, since July.

FY 2025 expectations: The company expects to grow revenues by increasing engagement trends and reducing churn with a more diverse entertainment offering, including more live events. Additionally, price hikes are expected in UCAN. Gaming and the growth of ads could be key drivers in 2025. According to consensus, analysts expect the company to generate a 28.4% margin from revenue of $43.8 billion and $12.4 billion in operating profit in FY 2024, which has not changed much since July 2024.

The stock price has traded up around 20% to $828 since last quarter’s release, driven by the resilience in the company’s net adds and the prospects from more live events. Will the outlook for the rest of 2025 support the continued upward trajectory of Netflix’s stock price?

The Direction of Key Netflix Estimates

Source: Visible Alpha consensus (January 15, 2025). Stock price data courtesy of S&P Global. Netflix stock price is as of the market close on January 14, 2025.

Netflix Fundamentals

Source: Visible Alpha consensus (January 15, 2025). Stock price data courtesy of S&P Global. Netflix stock price is as of the market close on January 14, 2025.

Nvidia’s Fiscal Q3 2025 Earnings

Nvidia (NASDAQ: NVDA) delivered total revenues for Q3 of $35.1 billion, beating Visible Alpha’s consensus estimate of $33.3 billion by $1.8 billion. This was driven by continued revenue growth in Nvidia’s Data Center segment, which saw its Q3 revenue surge to $30.8 billion, $1.5 billion ahead of the $29.3 billion consensus estimate coming into the quarter and capturing most of the beat to expectations.

This revenue surge has continued to be driven by strong demand for Hopper GPUs, particularly from cloud service providers. Blackwell demand is “staggering” with demand greatly exceeding supply. Management noted that they are on track to exceed their previous Blackwell revenue estimate of several billion dollars as visibility into supply continues to increase.

However, the Data Center segment’s non-GAAP gross margin dipped to 77.8% in Q3, slightly below consensus of 78.3%. This muted the magnitude of the surprise to the EPS line with non-GAAP diluted EPS of $.81/share, exceeding the consensus of $.75.

Nvidia Estimate Revision Trends

Source: Visible Alpha consensus (December 11, 2024). Stock price data courtesy of S&P. Nvidia’s current stock price is as of the market close on December 10, 2024.

The Outlook: Concerns about Blackwell’s Ramp and Gross Margin

For fiscal Q3 2025, Nvidia guided nearly $1 billion ahead of expectations to $37.5 billion in total revenue, with analysts now projecting the Data Center segment to make up $34.1 billion, up from $32.5 billion.

However, according to management, as Blackwell ramps, gross margins are expected to moderate to the low 70s. When fully ramped, the Company expects Blackwell margins to be in the mid-70s. However, there are questions about the timing of Blackwell’s ramp and how that will be reflected in the quarters.

This commentary in the earnings call led to a 100 bps decline in gross margins for both FY 2026 and FY 2027. Sentiment seems to be a bit more cautious on the magnitude of the earnings impact from Blackwell. It is worth noting that the timing of the Blackwell ramp will be a critical dimension to the investment thesis. There continues to be debate among analysts about the quarterly pace and timing of the B-series and GB-series ramps and how much the long-term expected growth is projected to add to revenues in FY 2026 and FY 2027.

According to Visible Alpha consensus, Data Center revenues for FY 2026 are now expected to be $183.8 billion, up from $179.8 billion on November 20, 2024, with consensus EPS increasing to $4.46/share, up only $.05/share, due to the margin shift.

Nvidia Consensus Estimates

Source: Visible Alpha consensus (December 11, 2024). Stock price data courtesy of S&P. Nvidia’s current stock price is as of the market close on December 10, 2024.

Dell’s Fiscal Q3 2025 Earnings

Dell (NYSE: DELL) delivered total revenues for Q3 of $24.4 billion, slightly missing Visible Alpha’s consensus estimate of $24.7 billion by $0.3 billion. The Infrastructure Solutions Group (ISG) segment saw its Q3 revenue come in at $11.4 billion, in line with the consensus estimate coming into the quarter. This segment was driven by a 58% increase in Servers and Networking. However, this was slightly below the level that was expected. In addition, Storage increased 4%, slightly ahead of expectations.

The company delivered a respectable AI server backlog of $4.5 billion in Q3. In Q3, the company shipped $2.9 billion of AI servers. The company noted on the Q3 call that it saw a shift of the orders moving towards the Blackwell design, the GB200, and this is now on backlog.

The ISG segment’s non-GAAP gross margin came in at 33.8% in Q3, in line with expectations and down from 37.3% in Q3 2023. Despite this decline in gross margin, the ISG operating profit margin came in at 13%, ahead of the 12% expected. In addition, Dell expects the ISG operating margin to continue to improve in Q4.

Revisions of Dell Estimates

Source: Visible Alpha consensus (December 11, 2024). Stock price data courtesy of S&P. Dell’s current stock price is as of the market close on December 10, 2024.

The Outlook: Below Expectations

Near-term Growth

For fiscal Q4 2025, Dell guided to $24.0-25.0 billion in total revenue, slightly below pre-Q expectations of $25.7 billion. The ISG segment revenue is projected to make up $11.8 billion, and to see its margin improve quarter over quarter from 13% to 15%. The ISG consensus margin for Q4 is expected to be 15.0%, up from 14.0% in Q3.

Long-term Outlook

Consensus for Dell’s FY 2025 revenues dropped to $96.1 billion from $97.7 billion, below what was expected by analysts ahead of Q3. However, ISG’s margins are trending better. Currently, Visible Alpha consensus is projecting ISG’s operating profit margin to jump from 8% in Q1 this fiscal year to 15% in Q4 and to 12% by the end of fiscal year 2025.

Looking further out, analysts remain bullish on the demand for AI servers. Based on six sources, analysts expect to see AI server revenue generate $10.5 billion in FY 2025 and to expand to $17.5 billion in revenue, an increase from the previous $13.8 billion estimate for FY 2026. ISG revenue is expected to grow to $51.7 billion in FY 2026, with nearly all of the year-over-year increase coming from the AI servers. ISG profitability is expected to hit 12.0% operating profit margin this year and to remain there for FY 2026. How long will it take to return to the previous 13% levels?

According to Visible Alpha consensus, EPS is expected to grow nearly 20% from $7.82/share in FY 2025 to $9.38/share in FY 2026. Estimates range from $8.30/share to $10.50/share and have widened, putting the FY 2026 P/E consensus at 12x, and in the 11x-14x range, up from 11x-13x.

DELL stock has traded down around 17.6% since last quarter’s November earnings release. Will the ramp in AI servers continue? Will ISG’s profitability return to beat expectations and be a catalyst in H1 2026?

Dell Consensus Estimates

Source: Visible Alpha consensus (December 11, 2024). Stock price data courtesy of S&P. Dell’s current stock price is as of the market close on December 10, 2024.

Snowflake Q3 2025 Earnings and Outlook Beat Expectations

According to Visible Alpha consensus, Snowflake’s (NYSE: SNOW) total revenues of $900 million and operating income of $59 million beat consensus expectations in Q3 2025. Operating profit expectations for the Q4 have moved up more than 20% from $34 million in November to now $42 million. However, these estimates are still significantly lower than the initial estimate of $102 million in January 2024. Operating profit expectations for FY 2025, FY 2026, and FY 2027 have all moved up since the release. Overall growth continues to be driven by the strength of Snowflake’s data platform, the potential network effects of moving more data there, and the promising outlook for their new AI-related products.

Currently, there is debate about gross margin performance. Based on Visible Alpha consensus, the non-GAAP gross margin estimates range from 73% to 81% for Q4 2025. For FY 2025, Visible Alpha consensus for gross margin has moved up to 76% from 75% last quarter, and is expected to remain at the 76% level over the next few years. It is still below the 77% previously expected for FY 2025 and FY 2026 at the beginning of the year, but consensus may have now settled at the correct level of 76%.

The stock has been a significant underperformer this year, but surged 32.9% since the November quarter’s release. Could the Q4 release provide more visibility into FY 2025 and lead to another positive catalyst for the stock?

Snowflake Revisions

Source: Visible Alpha consensus (December 11, 2024). Stock price data courtesy of S&P. Snowflake’s current stock price is as of the market close on December 10, 2024.

Nvidia Corp. (NASDAQ: NVDA) will report fiscal Q3 2025 results on Wednesday, November 20, 2024, after the market close. Here are the key numbers that we’re watching.

Nvidia – Consensus Expectations for Q3 2025, Past Earnings Surprises, Revisions, and CAGR

Source: Visible Alpha consensus (November 13, 2024). “Previous Surprises” indicate the direction that specific line items beat or missed. “Consensus Revisions” show the trajectory of line items from a given date.

Nvidia’s Q3 2025 Earnings Preview

According to Visible Alpha consensus, total revenues of $33.1 billion expected for Fiscal Q3 2025 have continued to increase steadily since the beginning of the year. Overall growth continues to be driven by optimism about the strength of Nvidia’s Data Center segment. This segment has seen its expected top-line performance for Q3 increase from $20.8 billion in January 2024 to its current projection of $29.0 billion, up nearly 50%. This revenue surge has been driven by strong demand for its GPUs from cloud service providers, and the move to accelerated computing in the data centers for AI.

More recently, the Data Center segment’s expected revenues in Q3 edged up slightly higher from $28.5 to $29.0, according to consensus. While the pace of analysts’ upward revisions to the Data Center segment has moderated since the first half of this year, it will be important to see how Nvidia guides the market for Q4 and the rest of FY 2025, and to what extent higher pricing and volumes will be expected to continue.

Currently, there is significant debate about the performance of the Data Center segment. Based on Visible Alpha consensus, this business is projected to generate $32.5 billion in revenues in Q4 2025, with estimates ranging from $29.2 billion to $40.1 billion. For FY 2025, Visible Alpha consensus for this segment has increased nearly $1.0 billion to $110.5 billion since the Q2 release in August, a slowdown from the pace of revisions in the first half. However, the estimates now range from $106.4 billion to $119.2 billion, a significant narrowing from the February range of $65.4 billion to $121.2 billion.

In particular, the company’s commentary and outlook for Blackwell will likely be important in the Q3 earnings call.  Blackwell revenue is expected to jump from $3-4 billion this year to $55.8 billion next year. Looking ahead, consensus expects FY 2026 Data Center revenue of $170.8 billion. The estimates for this line item range from $148.4 billion to $212.5 billion and remain a significant market debate, due to the questions around Blackwell’s ramp. It is worth noting that the consensus gross profit for the Data Center segment for FY 2026 has decreased by nearly $8 billion since last quarter, reflecting lower expectations for next year. In addition, for FY 2026 and FY 2027, consensus is projecting the operating profit margin to come down from this year’s peak of 66%. These dynamics in consensus estimates are causing the expected FY 2026 consensus P/E to be 36x and to range from 27x to 52x.

The stock has traded up 56% since the May release, and is up around 200% year-to-date. Could the Q3 release provide the next positive catalyst for the stock or are expectations largely priced in for now?

Nvidia Consensus Revisions

Source: Visible Alpha consensus (November 13, 2024). Stock price data courtesy of FactSet. Nvidia’s current stock price is as of the market close on November 12, 2024.

Nvidia’s Key Financial Items

Source: Visible Alpha consensus (November 13, 2024). Stock price data courtesy of FactSet. Nvidia’s current stock price is as of the market close on November 12, 2024.

Big Tech companies — Alphabet (NASDAQ: GOOGL), Meta (NASDAQ: META), Amazon (NASDAQ: AMZN), and Apple (NASDAQ: AAPL) — reported their latest earnings. Here’s a recap of those earnings, some key takeaways, and the resulting shifts in analysts’ estimates, according to Visible Alpha consensus.

Summary of Earnings

For the mega-cap tech companies, this earnings season has once again been dominated by mixed results around the core businesses and investing in the technology infrastructure to support generative AI (GAI). The dynamics of juggling talent and investment in multiple layers of the stack have added complexity to the business fundamentals. The mega-cap firms are all, in their own way, enhancing aspects of infrastructure, building off the existing large language models (LLMs) and supporting an environment for creating new GAI apps. However, given the strong pace of both CapEx and OpEx spending, there has been some concern that revenues are not growing in tandem, and expectations have become too high.

When will revenue growth begin to expand as rapidly as expenses?

CapEx and OpEx Snapshot

Source: Visible Alpha consensus (November 4, 2024)

Earnings Overview: GOOGL, META, AMZN, AAPL

Alphabet’s (GOOGL) Q3 2023 Earnings

According to Visible Alpha consensus, total revenues of $88.3 billion exceeded consensus expectations for Q3 2024, driven by resilience in its search business and strength in the Cloud segment. In addition, the Q3 consensus also exceeded expectations for operating income and EPS, coming in at $28.5 billion and $2.12/share, on the back of a stronger-than-expected cloud margin.

We have been closely monitoring the trend of the Cloud business. The operating profit margin has been trending better. Analysts expected the Cloud business to generate a 10.4% operating profit margin in Q3 2024, but the company reported a 17% margin, delivering a positive surprise and exceeding the top end of consensus estimates.

For the FY 2024 Cloud business, Visible Alpha consensus expects the operating profit margin to hit 13.9%, up from an 11% margin expectation prior to the earnings release. Longer-term, the consensus Cloud margin is estimated to generate a 20% margin by the end of FY 2026, with operating profit ranging from $7.8 billion to $17.9 billion. What will be the right margin level for Alphabet’s Cloud business?

Alphabet stock has traded up since last quarter’s release and up 22.5% in 2024, slightly outperforming the S&P 500’s return. The consensus P/E for FY 2025 is 19x and 16x for FY 2026. Questions remain about the profitability of the Cloud business and its Unallocated and Other Bets. Will the cloud margin continue its expansion in FY 2025?

CapEx has continued to increase reflecting investment in servers, data centers, and networking equipment. For 2024, the consensus now expects capex to be $51.5 billion, up from 50.7 billion, an increase of almost $15 billion since the beginning of the year. CapEx is projected to increase in 2025 to $58.7 billion, up significantly from $32.2 billion in 2023.

Alphabet – Consensus Estimate Revisions

Source: Visible Alpha consensus (November 5, 2024). Stock price data courtesy of S&P. GOOGL’s current stock price is as of the market close on November 2, 2024.

Alphabet – Consensus Estimates

Source: Visible Alpha consensus (November 5, 2024). Stock price data courtesy of S&P. GOOGL’s current stock price is as of the market close on November 2, 2024.

Meta Platforms’ (META) Q3 2024 Earnings

According to Visible Alpha consensus, total revenues for Q3 were slightly ahead of expectations at $40.6 billion, driven by solid performance in the Family of Apps segment, especially in the U.S. and Europe. However, operating profit exceeded expectations by around $1.4 billion at $17.4 billion, driven by resilience in the Family of Apps and losses that were lower than consensus in Reality Labs.

The company’s revenue outlook for Q4 was in line with expectations, but with the top-end of guidance exceeding consensus by $1.7 billion. Consensus now expects the Q4 operating profit to be $20 billion, $630 million higher than pre-Q levels, driven by higher profitability at the Family of Apps. For 2024, post-earnings expectations for operating income from the Family of Apps have increased over $3.5 billion to $84.1 billion since the July quarter, driven by higher ad revenue per DAU in the US and EU. In addition, the projected losses from Reality Labs for 2024 have increased only $500 million since July.

In addition, CEO Mark Zuckerberg highlighted that the company will continue to invest in servers and data centers to support AI, because it is expected to drive marketing and customer engagement across the Family of Apps. CapEx came in a bit above consensus for the quarter and is projected to climb in Q4 to $15.4 billion from $12.5 billion. On the earnings call, Meta explained that CapEx will further increase in 2025. Consensus now expects FY 2025 capex of $50.7 billion, up $3 billion from last quarter.

META stock has been an outperformer year to date, up over 60%. Will Meta remain disciplined in Q4 2024 and FY 2025 and continue to be an outperformer?

Meta Platforms – Consensus Estimate Revisions

Source: Visible Alpha consensus (November 4, 2024). Stock price data courtesy of S&P. META’s current stock price is as of the market close on November 1, 2024.

Meta Platforms – Consensus Estimates

Source: Visible Alpha consensus (November 4, 2024). Stock price data courtesy of S&P. META’s current stock price is as of the market close on November 1, 2024.

Amazon’s (AMZN) Q3 2024 Earnings

Total revenues of $158.9 billion for Q3 were over $1.5 billion above consensus, driven by higher revenues in North America and International retail. The International segment generated $35.9 billion in revenue, ahead of consensus by $1.5 billion, making up most of the top-line surprise. Revenues from Advertising and AWS were in line with consensus.

The North American retail operating margin increased to 5.9%, exceeding the 5.6% expected by consensus. After the Q3, the consensus margin for Q4 has edged up to 6.6%. Continued strength in Q4 is expected to drive a full-year margin of 6%, a significant improvement from last year’s 4.2%. This margin expansion was driven by improvement to their fulfillment network cost structure and inventory placement, leading to higher units per box. Similarly in the international segment, the operating margin hit 3.6%, almost 300 bps better than expectations ahead of the release. The international margin was also helped by strength in the UK and Germany and enhancements to the transportation network and their fulfillment centers. Looking further out, consensus expects the International margin to hit 5% by the end of FY 2026.

AWS margin came in very strong at 38% in Q3, well ahead of the consensus estimate of 33.2%, driven by a combination of a strong top line, managing costs, and a change in the estimated useful life of their servers. For 2024, analysts are now expecting a 36.6% margin, up from 34.6% last quarter. The company expects AWS growth to continue, driven by high demand for GAI.

The company guided to Q4 revenue of $181.5-188 billion, in line with the consensus of $186.4 billion, and to an operating profit of $16-20 billion, which was also in line with $17.5 billion coming into the Q3. Since the release, Q4 and FY 2025 consensus have increased further. The stock traded up 5% after the Q3 release. Could the retail business surprise the upside in Q4 or have retail margins peaked?

To support Amazon’s growing need for technology infrastructure, CapEx continued to increase further and for 2024, the consensus is expected to be $75 billion, up from 70 billion, an increase of over $10 billion since Q1. CapEx is projected to increase in 2025 to $85 billion, up significantly from $52 billion in 2023.

Amazon – Consensus Estimate Revisions

Source: Visible Alpha consensus (November 6, 2024). Stock price data courtesy of S&P. AMZN’s current stock price is as of the market close on November 5, 2024.

Amazon – Consensus Estimates

Source: Visible Alpha consensus (November 6, 2024). Stock price data courtesy of S&P. AMZN’s current stock price is as of the market close on November 5, 2024.

Apple’s (APPL) Q4 2024 Earnings

Total revenues of $94.9 billion for Q4 were in line with Visible Alpha consensus of $94.6 billion. Revenues of $46.2 billion from iPhone in Q4 were up 6% year-over-year. Based on consensus, Q3 iPhone units of 53 million were a bit better than expectations of 51 million. China continues to underperform and was flat this quarter, below the 5% growth expected by consensus.

Overall full-year iPhone revenue expectations of $209 billion have been moving around since the beginning of the year, suggesting debate in the market about the potential upgrade cycle. Currently, Q1 is expected to deliver $71.1 billion in iPhone sales, a small decrease since the earnings release.

While iPhone sentiment has ebbed and flowed since the beginning of the year, expectations for the high-margin Services segment and for total operating profit have remained relatively consistent. In Q4, the Services segment delivered $25.0 billion, up 13% year over year and close to consensus of $25.3 billion coming into the release. Gross margin for the Services segment was 74%, slightly below the 74.4% expected, but still solid. The 36.3% gross margin for Products, which was up 100 bps sequentially and 80 bps better than expectations. The company said that it continues to see increased customer engagement, with the Apple ecosystem supporting the future growth of the Services business. Based on consensus, Services is expected to hit $118.8 billion at the end of FY 2026, up over $22 billion from this year’s $96.2 billion.

Vision Pro delivered another set of results this quarter, a bit below expectations. For the FY 2025, consensus revenue estimates for the Vision Pro have remained at the current $1.2 billion.

The stock has traded down around the Q4 release, and up 16.9% since the beginning of the year, underperforming the S&P 500. Will users start to get excited about Apple Intelligence and drive iPhone upgrades that exceed expectations in FY 2025?

Apple – Consensus Estimate Revisions

Source: Visible Alpha consensus (November 5, 2024). Stock price data courtesy of S&P. AAPL’s current stock price is as of the market close on November 2, 2024.

Apple – Consensus Estimates

Source: Visible Alpha consensus (November 5, 2024). Stock price data courtesy of S&P. AAPL’s current stock price is as of the market close on November 2, 2024.

Netflix (NASDAQ: NFLX) reported its latest earnings results. Here’s a recap of those earnings, some key takeaways, and the resulting shifts in analysts’ estimates, according to Visible Alpha consensus

Netflix Beats Expectations

Netflix beat expectations in a few key areas, leading to stock price outperformance since the earnings release. At Netflix, while Q3 was solid, the Q4 and FY 2025 guidance came in above consensus, driving the stock price up over 8% since the release.

Q3 performance: Netflix Inc. (NASDAQ: NFLX) reported Q3 2024 results on Thursday, October 17, 2024. Q3 revenue of $9.8 billion was slightly ahead of consensus estimates, driven by a 15% increase in average paid memberships year-over-year. The company reported 5.1 million new additions. The ads plan accounted for over 50% of sign-ups in ads’ countries.

The UCan market saw 16% year-over-year revenue growth, driven by increases in paid memberships and ARM. In addition, APAC and EMEA showed strong double-digit increases. Latam revenue was up 9%, but there were some questions around the lack of paid net additions. Netflix delivered a Q3 operating profit of $2.9 billion and a 29.6% operating profit margin, ahead of consensus estimates coming into the quarter.

Q4 2024 expectations: The company guided Q4 to 15% year-over-year growth with revenue expected to be above $10 billion, a bit above consensus. Revenues are expected to be supported by continued net additions and monetization. Offering a range of pricing and plans combined with continuing growth in the ads business is expected to further increase monetization. Operating margin is expected to be 22.0%, over 100 bps better than expectations of 20.9%.

FY 2025 expectations: The company expects to grow revenues to $43-44 billion by increasing engagement trends and reducing churn with a more diverse entertainment offering. Gaming and the growth of ads could be key drivers in 2025. According to consensus, analysts expect the company to generate a 28.3% margin from revenue of $43.8 billion and $12.4 billion in operating profit in FY 2025.

Netflix Consensus Revisions

Source: Visible Alpha consensus (October 21, 2024). Stock price data courtesy of FactSet. NFLX’s current stock price is as of the market close on October 18, 2024.

Netflix Ads Business

According to the company, in Q3, the Ads tier grew 35% quarter-on-quarter and accounts for 50% of new sign-ups and continues to scale. In the Q3 shareholder letter and earnings call, management highlighted that the Ad Tier enables lower prices and additional revenue and profit. The Company stated in the earnings call that they expect that ads revenue will roughly double year-over-year and that they are currently seeing a 150% increase in our ads sales commitments.

Netflix remains upbeat about the long-term opportunity, given the size of its user base. The company continues to work on advertising business features, both to scale and to build out the technical capabilities. In particular, the company called out that they are scaling faster than their ability to monetize the growing ad inventory. This is creating a short-term drag on ARM. The company is working to balance building ads scale and revenue growth.

Ad-supported revenue expectations: Currently, consensus projects total ad-supported revenue to expand to over $7.5 billion by the end of FY 2027, up 4x from FY 2024 of $1.8 billion. There is a significant range of views on the magnitude of this growth. For FY 2027, analyst estimates range from $2.8 billion to $16.2 billion.

Longer-term Outlook

Based on Visible Alpha consensus, the operating profit margin is expected to grow from 26.6% in FY 2024 to 32.1% in FY 2027. Currently, consensus estimates the operating margin to surpass 30% in FY 2026, and for this to exceed 32% by the end of FY 2027, which may be aggressive given the investment likely required to scale the ads business. There is significant debate among analysts with respect to FY 2027 margin estimates, which range from 29% to 34%. This margin growth is expected to take FY 2024 expected diluted EPS from $19.76/share to $35.07/share or 23x FY 2027 P/E and a consensus target price of $778.

Netflix Consensus Estimates

Source: Visible Alpha consensus (October 21, 2024)