Netflix delivered a strong Q2 beat—revenue jumped 15.9% YoY to $11.08B, EPS rose 47% to $7.19, and it raised its full-year outlook to $44.8–45.2B . Total streaming revenue and ad-unit growth continue to impress, especially with live sports (NFL, boxing) and generative AI VFX initiatives .
However, Netflix fell ~1.8% in after-hours trading, suggesting concerns about already-high expectations and stretched valuation (~43x forward) .
🔍 What's Driving the Post-Earnings Reaction
1. Valuation pressure – After nearly doubling YTD, Netflix sits at ~43–50× forward EPS. Even a beat might not be enough to please investors .
2. Execution scrutiny – Key growth areas from ad-revenue to live content need consistent results. Street is watching next-gen series like Stranger Things and ad rollouts .
📈 My Strategy:
Short-term traders: Expect a 6% implied volatility move today—watch the $1,180–1,320 range with options. A small press-break trade could work.
Post-dip opportunity: Dip below $1,200 may be a buy-on-strength zone, especially if macro tech sentiment remains solid.
Longer-term: I'm neutral—waiting for execution proof on Netflix's ad and live content strategy before adding more.
✅ Suggested Play:
Consider a synthetic long straddle around $1,250 if you expect a bounce.
Or, sell a small covered call near $1,320 if you're cautious on valuation.
I'm not a financial advisor. Trade wisely, Comrades!
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