LOS GATOS, CA - Netflix Inc. (NASDAQ:NFLX), now a $372.5 billion market cap entertainment giant, has announced an additional $15 billion authorization for its stock repurchase program, as disclosed in a recent 8-K filing with the Securities and Exchange Commission. This decision follows a previous authorization in September 2023 and raises the total available for buybacks to approximately $17.1 billion as of December 31, 2024.
The company's stock has shown remarkable strength, delivering a 77.7% return over the past year.According to InvestingPro, Netflix maintains 16+ additional key insights about the company's performance and valuation, available for subscribers.
The company's board of directors approved the increase in December 2024, underscoring Netflix's continued strategy to return value to shareholders. With an "GREAT" financial health score from InvestingPro, strong cash flows, and a moderate debt level, the company appears well-positioned for this buyback program.
The repurchases may be conducted through various methods, including open market transactions, private negotiations, or accelerated repurchase plans, and will be subject to market conditions and other factors.
Alongside the announcement of the expanded buyback program, Netflix released its financial results for the fourth quarter ended December 31, 2024. The detailed financial data, including reconciliations of non-GAAP to GAAP measures, is available in the shareholder letter attached to the filing.
However, Netflix stated that predicting future reconciling items for non-GAAP financial measures is challenging due to variables such as property and equipment changes, other asset adjustments, and currency exchange rate fluctuations.
This latest move by Netflix indicates a robust position allowing for significant stock repurchases, although there is no obligation to repurchase any specific number of shares. The timing and volume of buybacks will be influenced by various conditions, including stock price and broader market dynamics. Based on InvestingPro's Fair Value analysis, Netflix currently appears to be trading at a premium to its intrinsic value, with a P/E ratio of 48x and strong revenue growth of 14.8% in the last twelve months.
In other recent news, Netflix has been the subject of several analyst notes and significant developments. The streaming giant is expected to report earnings per share of $4.20 on revenue projections of $10.13 billion, according to analysts. Netflix's subscriber growth figures are also anticipated, with consensus estimates predicting net subscriber additions of 9.1 million. Bernstein, a financial firm, suggests Netflix may exceed these estimates, attributing this potential success to the company's ad-tier offerings and targeted content strategy.
Evercore ISI has reiterated its Outperform rating on Netflix, expecting a modest beat on consensus estimates. The firm also anticipates a revenue growth of 14.5% year-over-year, an operating margin of 21.9%, and a possible upside to the earnings per share (EPS) of $4.20. On the other hand, Rosenblatt Securities has maintained a Neutral rating on Netflix, expressing uncertainty about the company's move into sports content.
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