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Netflix shares dip as Wall Street braces for quarterly report

Reuters  |  SAN FRANCISCO 

By Noel Randewich

SAN FRANCISCO (Reuters) - Shares of slipped 1 percent on Monday ahead of the video streaming service's quarterly report as investors braced for signs of whether it and other leading stocks are likely to carry the market higher over the next few weeks.

Options activity implied traders expect a move of at least 9 percent up or down in by Friday, according to data.

has surged 35 percent since its previous quarterly report on Jan. 22, making it one of Wall Street's best performers as the has slipped into correction territory and investors worry a nine-year bull market may be ending.

Netflix's March-quarter report after the bell on Monday will be the first from the so-called FANG stocks, which also includes , parent and , that have powered the market higher in recent years.

Investors will track how shares react in extended trade for clues about the market's willingness to push valuations higher.

Netflix's popularity with investors has put its stock price at 100 times expected earnings, down from a multiple of 117 times earnings in January but far higher than the S&P 500's earnings multiple of 16, according to I/B/E/S.

Investors on the Robinhood stock trading app, which is popular with young people, were buying shares 7 percent more than they were selling them ahead of Netflix's report. That compares to a buy/sell ratio of 20 percent ahead of Netflix's previous report, Robinhood said in an email.

Global searches for in the first quarter rose 32 percent year over year, slightly more than the 26 percent increase in the prior quarter, suggesting solid growth but no big upside surprise, wrote in a note to clients.

in January said it expected to add 6.35 million new streaming customers in the first quarter, helped by original content including "Stranger Things" and "The Crown."

"We believe management commentary on the impact of content and marketing investments, progress in emerging and more recently localized markets and long-term cash flow potential will be key to the sustained investment thesis," wrote in a preview.

Analysts on average expect quarterly revenue to jump 40 percent to $3.69 billion, according to data. Adjusted non-GAAP net income is expected to rise 60.5 percent to $286 million, or 64 cents per share, according to average estimates.

(Reporting by Noel Randewich; Editing by Meredith Mazzilli)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Tue, April 17 2018. 00:36 IST
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