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Market Domination Overtime
- BusinessYahoo Finance Video
Netflix earnings, Mark Cuban: Market Domination Overtime
After the Dow Jones Industrial Average (^DJI) closes at another record high led by chip stocks, Market Domination Overtime Hosts Julie Hyman and Josh Lipton, joined by top Wall Street experts, break down the top stories affecting the market. Stifel chief equity strategist Barry Bannister recaps his biggest takeaways from the third quarter earnings season and his expectations for the market. Mark Cuban has joined Vice President Kamala Harris on the campaign trail. Yahoo Finance Washington Correspondent Ben Werschkul breaks down what the businessman and billionaire brings to the Harris campaign weeks ahead of the presidential election. Netflix (NFLX) reported third quarter results that topped analyst estimates on the top and bottom lines. Bloomberg Intelligence senior media analyst Geetha Ranganathan outlines the result and discusses what's next for the streaming company. Editor's note: The video above incorrectly indicates Netflix reported third quarter revenue of $10.13 billion and earnings per share of $4.23. The correct figures are third-quarter revenue of $9.83 billion and EPS of $5.40. The company's fourth quarter guidance projects revenue at $10.13 billion and $4.23 EPS. We regret the error. This post was written by Naomi Buchanan.
- BusinessYahoo Finance Video
Netflix beats and raises. It's time for a price hike: Analyst
Netflix (NFLX) reported third quarter results that topped analyst estimates on the top and bottom lines. Diluted earnings per share are at $5.40, compared to the $5.12 expected, while revenue sat at $9.83 billion, just ahead of the $9.78 billion Wall Street expected, according to Bloomberg consensus estimates. The streaming giant added 5.07 million paid subscribers during the quarter, above the 4.52 expected. The company released its fourth quarter outlook with diluted earnings per share to come in at $4.23, compared to analyst estimates of $3.90 and $10.13 billion in revenue, above the $10.01 billion expected. Bloomberg Intelligence senior media analyst Geetha Ranganathan joins Market Domination Overtime Hosts Julie Hyman and Josh Lipton to discuss Netflix's results and what's next for the streaming company. "It's a pretty high-quality beat," Ranganathan tells Yahoo Finance. "If you were looking for the subscriber numbers, they were definitely there. If you're looking for the top-line growth number, they obviously over-delivered on that. But I think what really kind of stood out to me was their margin guidance." She explains that the company seems to be providing a conservative margin outlook, given its sales guidance implies some operating margin expansion. "It's probably a little bit of a conservative approach, but but this is this is exactly how Netflix wants to spin their new narrative. Remember, in a few months, they are going to stop disclosing subscriber metrics. They really want to position themselves as a top-line growth story and definitely as a bottom-line growth story as well." Ranganathan says the next step investors want to see from Netflix is a price hike. "A price increase is long overdue, and I think that's really what investors are looking for," she says, adding, "You look at the valuation of this stock, I mean that it's premium valuation, there's no doubt about it. Revenue growth is really kind of what underpins that that lofty valuation. And for you to have consistent revenue growth, obviously, you need those price increases. And why not?" The analyst says Netflix has the pricing power and engagement to justify increasing prices, but "They're just waiting to see how to kind of implement that price increase. They're going to have to do it very carefully because, remember, they're trying to balance subscriber growth along with revenue growth. At the same time, they also have to grow their advertising tier, and how much they grow their advertising tier will depend on how they price the ad-free tier because if they really increase the price substantially, they could end up driving a lot more subscribers to that ad-based tier and beefing up their advertising revenue... it's going to be a really careful balancing act." To watch more expert insights and analysis on the latest market action, check out more Market Domination Overtime here. This post was written by Naomi Buchanan.
- BusinessYahoo Finance Video
Fed should not be in a hurry to cut rates: Stifel's Bannister
The Dow Jones Industrial Average (^DJI) capped Thursday's session with another all-time high for the index this week. Stifel chief equity strategist Barry Bannister joins Market Domination Overtime to discuss his biggest takeaways from this earnings season and his outlook for the market. Bannister's biggest takeaway boils down to the Federal Reserve's interest rate cuts: "The no landing scenario looks like a pretty strong one now, and it certainly renders the question of whether the Fed should cut rates in 2025 at all. The financials (XLF), particularly, and their results tell us that." He believes the Fed could cut by 25 basis points at the next two meetings of the year. However, once rates fall to 4.25%, he believes the Fed can pause its cutting cycle, arguing, "Clearly, they're underestimating the growth potential of the economy." "Granted, there's going to be an adjustment up over time as rates reset to the higher level. But maintain them for a while until the reset occurs and then cut rates. But don't just be in a hurry to cut rates," Bannister continues. He believes markets (^DJI, ^IXIC, ^GSPC) should be taking out some of the rate cuts that have already been priced in. He explains that this move would probably cause a pullback in the market, which he believes "is not entirely an unhealthy thing." "We're in a very frothy market. And you know, John Templeton once said that bull markets are born on pessimism and grow on skepticism, mature on optimism, and die on euphoria. We've crossed out of optimism. We're already in this kind of euphoria now," he concludes. To watch more expert insights and analysis on the latest market action, check out more Market Domination Overtime here. This post was written by Melanie Riehl
