Can Netflix stock double in 2020?

The leading premium streaming video platform hasn't doubled in a single year since 2015. A strong report on Tuesday can help it happen this year.

| More on:

Should you invest $1,000 in Orora right now?

Before you buy Orora shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Orora wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

Netflix movie showing five female actors in period costume

Image source: Netflix

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

We're diving into earnings season, and Netflix (NASDAQ: NFLX) is one of the early arrivals with its third-quarter financial report on Tuesday afternoon. The leading premium video service is riding high. The shares enter the new trading week with a 64% year-to-date gain. 

There have been moments of mortality on the way up. Netflix stock declined 6.5% the day after it posted results for its second quarter, so investors know that volatility is the norm during earnings season. Expectations are high leading into this week's report. Let's take a closer look at Netflix and what it will have to prove to Wall Street if it can keep the upticks coming.

Binge investing pays off

We know what Netflix was expecting to do in the third quarter. Three months ago it was targeting $6.327 billion in revenue for the quarter, 20.6% more than it delivered a year earlier. The bottom line is growing even faster, as the $2.07 a share profit that Netflix was modeling in mid-July is 42.2% ahead of where it landed in the third quarter of last year. 

It's not a surprise to see Netflix booming. We're spending more time at home, and no one is spending as much as Netflix on content to keep its subscribers well-stocked with binge-worthy entertainment. Its summertime outlook calls for 195.45 million paying streaming members worldwide, a 23.4% increase over the past year.

Analysts aren't tethered to what Netflix saw in its crystal ball three months ago. The consensus Wall Street estimate calls for $2.13 a share in earnings on $6.38 billion in revenue. They clearly think that the fundamentals have inched higher in recent months, but Netflix historically putting out conservative guidance probably steers analysts to aim higher. 

There are a few reasons to get excited with Netflix reporting shortly after Tuesday's market close. It has quietly ended the free trials it offers US subscribers, something that it wasn't likely to do if it was struggling in attracting new members. It doesn't seem to be in a hurry to increase domestic prices – especially after the hit it took on the subscriber front the last time it pushed out a hike – but anything it can do to keep its subscriber base close and growing in these competitive times is a positive achievement. 

Despite trouncing the market in 2020, the shares are actually marching in place in recent months. The stock is trading a mere 0.6% higher than it was the day it announced second-quarter results three months ago. A strong report – especially after the market's uninspiring reaction last time out – would result in a healthy bounce on Wednesday. We're not talking about a short squeeze, as short positions have actually been sliding steadily since peaking in December. However, another beat coupled with encouraging guidance to close out the final quarter of 2020 and the stock could be off to the races again. 

Netflix would have to climb 22% in the remainder of this year to double in 2020, and that's certainly possible with a blowout performance this week. Netflix has been one of the market's hottest stocks over the past decade, but doubling in a single year is something that the shares haven't done since 2015. Netflix stock nearly quadrupled in 2013. The stage is set for Netflix to do something that it hasn't done in five years, but it's best chance to make it happen is now just a trading day away.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Rick Munarriz owns shares of Netflix. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Netflix. The Motley Fool Australia has recommended Netflix. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on International Stock News

Warren Buffet
International Stock News

7 ways Warren Buffett changed my investing approach

I'm a big fan of Warren Buffett, and have been for many years.

Read more »

iPhone with the logo and the word Google spelt multiple times in the background.
International Stock News

Down 12% this year, should you buy Alphabet stock?

The Google owner is underperforming the Nasdaq Composite, which has rallied in recent weeks.

Read more »

A male investor sits at his desk looking at his laptop screen holding his hand to his chin pondering whether to buy Macquarie shares
International Stock News

Missed out on Apple in 2012? Buying Nvidia stock today could be your second chance

By now, it's clear that artificial intelligence (AI) is the next major technology platform.

Read more »

Robot humanoid using artificial intelligence on a laptop.
International Stock News

3 reasons Amazon stock looks like an incredible bargain right now

Here are three reasons Amazon stock looks like a rare bargain at current levels.

Read more »

Legendary share market investing expert and owner of Berkshire Hathaway Warren Buffett
International Stock News

Warren Buffett's $347 billion warning to Wall Street is ringing out loud and clear. History says this happens next.

Let's take a look.

Read more »

Warren Buffet
International Stock News

Warren Buffett nearly made his biggest investment since 2022. Here's what's holding him back.

Buffett said Berkshire came close to spending $10 billion, and he'd happily spend $100 billion.

Read more »

Happy man working on his laptop.
International Stock News

Here's why Amazon is a brilliant buy now (Hint: It's not e-commerce)

Fortunately for investors, cloud computing is going through a massive boom.

Read more »

A man looking at his laptop and thinking.
International Stock News

With Warren Buffett stepping down as CEO, will Berkshire Hathaway sell Apple stock?

Or will it find something else to invest in? Let's take a look.

Read more »