Consumer Subscription Stocks Q1 Teardown: Netflix (NASDAQ:NFLX) Vs The Rest

Looking back on consumer subscription stocks’ Q1 earnings, we examine this quarter’s best and worst performers, including 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 satisfactory Q1. As a group, revenues beat analysts’ consensus estimates by 1.9% while next quarter’s revenue guidance was in line.

Luckily, consumer subscription stocks have performed well with share prices up 25.5% on average 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 $10.54 billion, up 12.5% year on year. This print was in line with analysts’ expectations, and overall, it was a strong quarter for the company with EPS guidance for next quarter exceeding analysts’ expectations and a solid beat of analysts’ EBITDA estimates.

Interestingly, the stock is up 31% since reporting and currently trades at $1,278.

We think Netflix is a good business, but is it a buy today? Read our full report here, it’s free.

Best Q1: 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 $230.7 million, up 37.7% year on year, outperforming analysts’ expectations by 3.4%. The business had a very strong quarter with an impressive beat of analysts’ EBITDA estimates and full-year EBITDA guidance exceeding analysts’ expectations.

Duolingo pulled off the fastest revenue growth and highest full-year guidance raise among its peers. The company reported 130.2 million users, up 33.4% year on year. However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $401.

Is now the time to buy Duolingo? Access our full analysis of the earnings results here, it’s free.

Weakest Q1: Roku (NASDAQ:ROKU)

Spun out from Netflix, Roku (NASDAQ: ROKU) makes hardware players that offer access to various online streaming TV services.

Roku reported revenues of $1.02 billion, up 15.8% year on year, exceeding analysts’ expectations by 1.5%. Still, it was a slower quarter as it posted a significant miss of analysts’ EBITDA estimates.

Interestingly, the stock is up 25.1% since the results and currently trades at $84.20.

Read our full analysis of Roku’s results here.

Coursera (NYSE:COUR)

Founded by two Stanford University computer science professors, Coursera (NYSE:COUR) is an online learning platform that offers courses, specializations, and degrees from top universities and organizations around the world.

Coursera reported revenues of $179.3 million, up 6.1% year on year. This result beat analysts’ expectations by 2.3%. Overall, it was a strong quarter as it also produced EBITDA guidance for next quarter exceeding analysts’ expectations.

The company reported 175.3 million active customers, up 18% year on year. The stock is up 10.8% since reporting and currently trades at $8.51.

Read our full, actionable report on Coursera here, it’s free.

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 $200.3 million, up 1.8% year on year. This print surpassed analysts’ expectations by 1.5%. It was a strong quarter as it also put up EBITDA guidance for next quarter exceeding analysts’ expectations.

Udemy had the weakest full-year guidance update among its peers. The company reported 17,216 active buyers, up 7.1% year on year. The stock is flat since reporting and currently trades at $6.85.

Read our full, actionable report on Udemy here, it’s free.

Market Update

As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.

Want to invest in winners with rock-solid fundamentals? Check out our Strong Momentum Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.