Jim Cramer is Talking About These 14 Stocks Before Earnings

3. Netflix, Inc. (NASDAQ:NFLX)

Number of Hedge Fund Holders: 103

Cramer has been bullish on Netflix, Inc. (NASDAQ:NFLX) for some time. During Friday’s episode, he posited his opinion that the company will report good news.

“We get results from Netflix and the Street’s been all over the place on this one. I think it’ll be good, thanks to the new ad tier. And they’re about to release Squid Game 2. I’m told it’s going to be a guaranteed worldwide blockbuster, could bring in new subscribers from around the globe.”

Jim Cramer recently voiced his disagreement with Barclays’ pessimistic view that Netflix (NASDAQ:NFLX) would struggle to meet its revenue estimates. Cramer pointed out that the growth of the company’s advertising business, combined with new revenue streams from paid sharing plans, has provided the company with greater flexibility in achieving its revenue goals. He noted that starting next year, the streaming giant will no longer report quarterly subscriber figures, allowing a shift in focus solely to revenue expectations, which he believes is the crucial new metric.

Cramer also highlighted Piper Sandler’s position that even if Netflix (NASDAQ:NFLX) cannot maintain the same margin expansions as in the past year, it can still achieve steady growth. He expressed agreement with this perspective, suggesting that it shows a realistic approach to the company’s potential.

What truly matters, according to Cramer, is whether the company meets its financial targets. If the company continues to outperform earnings expectations, as it has done in 10 of the last 12 quarters, then concerns about its valuation become less relevant, as the stock price will appear more attractive in hindsight. Conversely, if it fails to deliver on its numbers, there would be little justification for a high stock price, which could lead to a decline.

Cramer believes the company deserves the benefit of the doubt, which is why he maintains a bullish stance on the stock. He remarked that the bear thesis seems overly speculative and not firmly grounded in current realities. It should be noted that this year, the company reached a significant milestone by exceeding 40 million members in its ad-supported tier. The company announced a 17% increase in revenue for the second quarter, along with a 17% growth in its paid streaming memberships from the prior year, which have now reached a total of 278 million.