Netflix reports earnings amid stock slump, Peloton stock crashes

Yahoo Finance's Jared Blikre details the big stories in the stock market on Thursday,

Video Transcript

ALEXIS CHRISTOFOROUS: But we can just call it the great snapback on Wall Street because the NASDAQ rebounding after slipping into correction territory yesterday, when it was down 10% from its recent high. We've got tech and financials staging a comeback today, Karina, to lead that advance.

KARINA MITCHELL: Yeah, Alexis, looks like we've got a little bit of a rally on our hands. Investors clearly buying the dip. That's just why some rising jobless claims numbers that we got in, data showing home sales dropped 4.6% in December as supply hit a record low.

So looking at those numbers on the benchmarks, the Dow up by about 290 points. The S&P also higher by 46 points. And the NASDAQ better by 199 points. The Dow, actually, off session highs at the moment, but, obviously, still in the green.

I also want to point out that the small-cap Russell 2000 up nearly 2% today after hitting a 52-week low yesterday on sector wise, everything in the green. The big winner, of course, tech, today, followed by consumer discretionary.

Headed over to the bond sector and take a look at the yields. The 10-year is up by, you know, just a little bit. It's at 1.83%, so still off that 1.9% high that we saw. And, of course, the 30-year up at 2.15% right now. Here with a closer look at the market action is Yahoo Finance's Jared Blikre. Jared, what a difference a day makes. And a lot of eyes looking for those Netflix results later on today.

JARED BLIKRE: That's right, Karina. And let's begin with that. I'm looking at expectations. And this is a key number here for Netflix, streaming paid net changes for the fourth quarter. "TheStreet" is expecting 8.3 million. And that breaks down by region-- excuse me-- United States and Canada expecting a bump up of 650,000. East, Middle East, and Africa is 3 and 1/2 million. Latin America, 1 and 1/4 million. And Asia-Pacific nearly 3 million.

And the gap EPS estimates for the results is $0.80 for the current quarter, revenue estimate at $7.71 billion. And I got some analysts' commentary here. And let me put up a one-year-- actually a two-year chart here.

Now we can see Netflix recently broke to record highs, only to fall back down to the bottom of its trend channel here. But here's what Evercore is expecting. They recommend the stock with an outperform rating, a price target of $710. That's $190 above the current price. They're saying stabilization of subscriber [INAUDIBLE] growth at or close to pre-COVID levels is a key catalyst for the stock. The company needs to add 25 million-plus subscribers in 2022, expand its operating margin, and accelerate average revenue per user globally.

And we also know that the firm-- that Netflix just raised their prices around the US by $1 to $2. So the focus is gonna be on their expectations. So for the first quarter, "TheStreet" believes streaming paid net change will come in at 6.3 million. And then they have a revenue estimate of $8.12 billion with a gap EPS estimate of $3.38.

Again, that's for the first quarter. And then for the whole year, they're expecting the free cash flow-- excuse me-- free cash flow to be $990.1 million. And the operating margin, they're estimating that at $22.7 million.

But there's another stock in the NASDAQ 100 I want to get to here. It's Peloton. That stock is off 24%. Here is an intraday chart of what's happening today. Let's take a look at a MAX chart going back to the IPO.

You can see from their IPO, they are now underwater by 4.8%. What is the news here? They are halting production on all of their bikes, treadmills, and other products that are in their connected fitness line. And that's as demand has waned.

So this comes from a CNBC report. They saw an investor presentation from January 10 that said demand for its connected fitness equipment has faced, quote, "a significant reduction" around the world due to shoppers' price sensitivity and amplified competitor activity. So you can see that stock really taking it on the chin there.

But guess what else is not taking it on the chin? We got Tesla up 3%. The mega caps are up. Apple is looking at gains of 1%, Microsoft up 1 and 1/2%, Facebook up 1%. So, Karina, to your point, really mounting a comeback after the NASDAQ slipped into correction territory yesterday.

And I'll just reiterate one more time. I'm writing an article for YahooFinance.com. Gonna be published in about an hour or so. The day after the NASDAQ slips and the correction tends to be positive. 13 out of the last 14 times since 1997, it has been a buy. It tends to be what we're seeing here today, guys.

ALEXIS CHRISTOFOROUS: All right. Always love those stats. Thanks for digging that up for us, Jared Blikre.