Bullish Options Sentiment Heats Up Ahead of Netflix Earnings; Wall Street Consensus Rating: "Strong Buy"
Taylor Wilson
Netflix reports Q2 after Thursday's close. Call volume ran three times put volume for two straight sessions, yet the stock is down nearly 20% year-to-date and has fallen after each of the last four reports — Wall Street's consensus is still "Strong Buy," with an average target 53% above the current price.
What is the options market betting on?
Last Friday and Monday, call volume nearly tripled put volume. Selling at-the-money puts — collecting a premium while betting the stock won't break below a set price — became one of the most popular trades.
This means → options traders are broadly positioned for "earnings won't be terrible," backing that view with real money on the line.
Context matters: Netflix is down almost 20% this year and has dropped after all four of its last earnings prints. Whether this bullish tilt is a reversal signal or a contrarian gamble depends on Thursday's numbers.
How much movement are options pricing in?
Implied post-earnings move sits at 7.6%, slightly above the 7.4% average actual move over the past year.
In plain terms = the market expects roughly the same size swing as usual — no one is pricing a blockbuster surprise.
Monday's highest-volume contract was a $75-strike put expiring Friday. One large block sold 500 contracts, collecting roughly $150,000 in premium. Of about 20,000 trades in that contract, roughly 15,000 were sells — this signals limited appetite to hedge against a sharp short-term drop.
Where is the key technical level?
Netflix trades near $75, testing its rising 200-week moving average and the $70 support level.
Todd Gordon, founder of Inside Edge Capital, notes that $70 was resistance in late 2021, then flipped to support after a breakout. He said: "If the $70 technical support holds, it may be time to reconsider buying Netflix."
Historical context: in late 2021, Netflix began an 80% plunge from roughly $75 and spent years recovering, peaking at $134 last June — now it is back where that sell-off started.
Content struggles and ad growth — two different stories?
LightShed Partners analyst Rich Greenfield put it bluntly: "Netflix has not had a hit show this year." Nielsen data show Netflix's U.S. TV viewing share hit a one-year-plus low.
Total subscribers are still growing, but per-user watch time is declining. This means → newer ad-tier subscribers watch less than legacy users, dragging down the average; rising competition is also a factor.
The ad business tells the opposite story: global ad-supported monthly active viewers topped 250 million. Netflix plans to double ad revenue to roughly $3 billion by 2026 and expand its lower-cost ad tier to more international markets.
What does Wall Street expect, and what should investors watch?
Consensus calls for Q2 EPS of $0.79 and revenue of about $12.58 billion. Netflix's own guidance pegs revenue at roughly $12.57 billion, up about 13.5% year-over-year, with full-year revenue expected between $50.7 billion and $51.7 billion.
Per Tipranks, the Wall Street consensus rating is "Strong Buy" with an average price target of $112.70 — roughly 53% above the current level.
Beyond the numbers, investors will watch subscriber trends, ad monetization progress, and content spending — especially after co-founder Reed Hastings recently stepped down as chairman. Whether earnings can break the four-quarter losing streak is this week's central test.
Content is for reference only, not financial advice.