Backtested performance is developed with the benefit of hindsight and has inherent limitations. This information is provided for illustrative purposes only. No representations and warranties are made as to the reasonableness of the assumptions. Certain assumptions have been made for modeling purposes and are unlikely to be realized. Changes in these assumptions may have a material impact on the backtested returns presented. General assumptions include: XYZ firm would have been able to purchase the securities recommended by the model and the markets were sufficiently liquid to permit all trading. Backtested results are calculated by the retroactive application of a model constructed on the basis of historical data and based on assumptions integral to the model which may or may not be testable and are subject to losses. The results reflect performance of a strategy not historically offered to investors and does not represent returns that any investor actually attained. Backtested performance is not an indicator of future actual results. On the contrary, if this level breaks down, investors should consider waiting or managing positions to reduce risk ahead of earnings.Disclaimer: The TipRanks Smart Score performance is based on backtested results. If the stock intends to rally into the earnings report scheduled for October 18, this level offers a favorable risk level for long positions. This level was previously a significant breakout level that is now acting as support. The 370-level on the stock provides a great risk-reward opportunity to investors if it can hold the bid. Moreover, advertising is becoming a bigger and more durable revenue stream than paid sharing over time, and the streaming giant's ability to maintain pricing power has analysts encouraged about the future of the stock. On the positive side, JPMorgan continues to believe that paid sharing will prove highly accretive to NFLX revenue over time, while advertising will also contribute more significantly in the fourth quarter and into 2024. and expanding the price gap between its standard ad-free plan and its ad-supported tier. The streaming giant has also modified its pricing tiers, discontinuing its basic ad-free tier in the U.S. Either way, NFLX should be able to report higher revenue, which is particularly important after disappointing investors with the stock down 21% compared to NASDAQ's -9% since reporting 2Q earnings on 7/19. The price increase is expected to boost Average Revenue per Member (ARM), either by driving more subscribers to the higher ARM ad-tier relative to the ad-free Standard plan or by increasing ad-free ARM. This presents an intriguing opportunity for investors if the stock can hold this critical level on the Daily & Weekly Chart. However, the stock received a significant boost when the company announced its intention to raise prices after the Actor Strike ends. The recent comments by the CFO about the company not being near peak margins did not help the stock. The stock has been continuously punished due to the current market environment and the Writers' Strike. Netflix (NASDAQ:NFLX) is down 22% from its highs of 485 after the latest earnings report.
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