Earnings results often indicate what direction a company will take in the months ahead. With Q3 behind us, let’s have a look at Netflix (NASDAQ: NFLX) and its peers.
Consumers today expect goods and services to be hyper-personalized and on demand. Whether it be what music they listen to, what movie they watch, or even finding a date, online consumer businesses are expected to delight their customers with simple user interfaces that magically fulfill demand. Subscription models have further increased usage and stickiness of many online consumer services.
The 8 consumer subscription stocks we track reported a mixed Q3. As a group, revenues beat analysts’ consensus estimates by 1.3% while next quarter’s revenue guidance was in line.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 7.4% since the latest earnings results.
Netflix (NASDAQ: NFLX)
Launched by Reed Hastings as a DVD mail rental company until its famous pivot to streaming in 2007, Netflix (NASDAQ: NFLX) is a pioneering streaming content platform.
Netflix reported revenues of $11.51 billion, up 17.2% year on year. This print was in line with analysts’ expectations, but overall, it was a slower quarter for the company with a significant miss of analysts’ EBITDA estimates and revenue in line with analysts’ estimates.
Netflix delivered the weakest performance against analyst estimates of the whole group. The company reported 317.3 million users, up 12.2% year on year. Unsurprisingly, the stock is down 8.5% since reporting and currently trades at $1,137.
Is now the time to buy Netflix? Access our full analysis of the earnings results here, it’s free for active Edge members.
Best Q3: Roku (NASDAQ: ROKU)
With a name meaning six in Japanese because it was the founder's sixth company that he started, Roku (NASDAQ: ROKU) makes hardware players that offer access to various online streaming TV services.
Roku reported revenues of $1.21 billion, up 14% year on year, in line with analysts’ expectations. The business had a strong quarter with EBITDA guidance for next quarter exceeding analysts’ expectations and full-year EBITDA guidance exceeding analysts’ expectations.
The market seems happy with the results as the stock is up 6.9% since reporting. It currently trades at $106.98.
Is now the time to buy Roku? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q3: Bumble (NASDAQ: BMBL)
Started by the co-founder of Tinder, Whitney Wolfe Herd, Bumble (NASDAQ: BMBL) is a leading dating app built with women at the center.
Bumble reported revenues of $246.2 million, down 10% year on year, in line with analysts’ expectations. It was a softer quarter as it posted a decline in its buyers and a significant miss of analysts’ number of paying users estimates.
As expected, the stock is down 25.5% since the results and currently trades at $4.03.
Read our full analysis of Bumble’s results here.
Duolingo (NASDAQ: DUOL)
Founded by a Carnegie Mellon computer science professor and his Ph.D. student, Duolingo (NASDAQ: DUOL) is a mobile app helping people learn new languages.
Duolingo reported revenues of $271.7 million, up 41.1% year on year. This result topped analysts’ expectations by 4.3%. Zooming out, it was a satisfactory quarter as it also logged an impressive beat of analysts’ EBITDA estimates but EBITDA guidance for next quarter missing analysts’ expectations.
Duolingo pulled off the biggest analyst estimates beat and fastest revenue growth among its peers. The company reported 135.3 million users, up 19.6% year on year. The stock is down 25.6% since reporting and currently trades at $194.60.
Read our full, actionable report on Duolingo here, it’s free for active Edge members.
Udemy (NASDAQ: UDMY)
With courses ranging from investing to cooking to computer programming, Udemy (NASDAQ: UDMY) is an online learning platform that connects learners with expert instructors who specialize in a wide range of topics.
Udemy reported revenues of $195.7 million, flat year on year. This number beat analysts’ expectations by 1.4%. Aside from that, it was a satisfactory quarter as it also produced a solid beat of analysts’ EBITDA estimates but revenue guidance for next quarter missing analysts’ expectations significantly.
The company reported 17,111 active buyers, up 1.6% year on year. The stock is down 17.8% since reporting and currently trades at $5.26.
Read our full, actionable report on Udemy here, it’s free for active Edge members.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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