Netflix options pricing suggests traders expect the streaming giant’s stock price to rise or fall about 8.5% after it reports first-quarter earnings on Thursday.
Netflix has been one of the most volatile stocks in the S&P 500 over the past three years, according to a JPMorgan analysis of S&P 500 components and their post-earnings moves.
Analysts are generally bullish on Netflix’s stock, seeing the company as likely to weather the economic fallout from the ongoing trade war.
Netflix ( NFLX ) is expected to report first-quarter results after the market closes Thursday, and the options market suggests traders expect big price swings in the coming days.
Netflix options pricing on Wednesday suggests the stock is expected to move about 8.5% in either direction in the week following Thursday’s report, which would imply a range of $893.47 to $1,059.09. (U.S. financial markets were closed on Friday, meaning any major moves in the stock wouldn’t happen until next week.)
Uncertainty is high ahead of Netflix’s earnings report, and that unease is reflected in options prices for nearly all stocks. “The market is pricing in the highest implied earnings volatility since the first quarter of 2020,” JPMorgan analysts wrote in a note Monday. According to their calculations, the average implied earnings daily volatility for the stocks they cover this quarter was 8.1%, compared to an average realized volatility of 6.5% last quarter and an average of 5.9% over the past three years.
In the same note, JPMorgan compared the historical post-earnings volatility of the 60 largest stocks in the S&P 500 with their implied volatility for the current quarter. They found that Netflix was one of the stocks with the most underestimated (or “cheap”) post-earnings volatility. The stock’s post-earnings volatility has averaged about 11% over the past three years, making Netflix and Meta Platforms (META) the most volatile stocks in JPMorgan’s sample.
Netflix’s implied volatility is “cheap,” which makes it stand out from a handful of stocks. JPMorgan’s analysis shows that only nine stocks in the S&P 500 have below-average volatility. Tech giants Nvidia (NVDA), Meta, Broadcom (AVGO) and Oracle (ORCL) are among them.
Netflix Stock Remains Strong Ahead of Earnings
Netflix shares have surged after each of its last two earnings reports. In January, the company beat fourth-quarter earnings expectations, sending its shares up nearly 10% the next day. The company also raised its 2025 revenue forecast and expanded its share buyback program by $15 billion. In October, Netflix beat revenue and profit expectations and said its ad-supported subscription service was in strong demand, sending its shares soaring more than 11% the next day.
Netflix shares surged on Tuesday following reports that the streaming giant plans to double revenue to about $78 billion by 2030. The company hopes the ambitious goal will allow it to join tech giants like Alphabet (GOOG) and Amazon (AMZN) in the $1 trillion market cap club.
Analysts are generally bullish on Netflix’s stock heading into its upcoming earnings report. Oppenheimer maintained its “buy” rating and $1,150 price target (one of the highest on Wall Street) on Monday, expressing confidence that the streaming company will be largely unaffected by tariffs and a slowing economy.
Netflix shares fell 1.5% Wednesday amid a broad sell-off. Despite the decline, the company’s shares are still up about 8% so far this year and 56% over the past 12 months.
