Zacks Investment Ideas feature highlights: Netflix, Eaton and Centene
For Immediate Release
Chicago, IL – May 27, 2025 – Today, Zacks Investment Ideas feature highlights Netflix NFLX, Eaton ETN and Centene CNC.
These 3 Companies Crushed Earnings Season
The 2025 Q1 earnings season is slowly winding down, with the majority of S&P 500 companies already delivering their results. The period has overall been positive, though commentary surrounding upcoming periods has largely dictated post-earnings moves amid elevated uncertainty stemming from tariff talks.
Still, several companies – Netflix, Eaton and Centene – knocked it out of the park, posting robust results that had shareholders pleased. Let's take a closer look at each release for those interested in near-term momentum.
Netflix Shares Surge
Consistently strong results have led to NFLX's surge over the past year, with the reaffirmation of FY25 guidance in its latest print going a long way in alleviating investors amid the uncertain environment. Up 90% over the past year, the stock has been a massive bright spot, with its run seemingly being ignored by many amid other trends like the AI frenzy.
Continued subscriber growth has been the real highlight from Netflix, with the company reporting a negative subscriber growth rate just once over its last 12 quarters. The ad-supported tiers were a big surprise to consumers initially given Netflix's popularity for being ad-free, but the success of the implementation is notable.
A big crackdown on password sharing, though initially met with blowback among subscribers, has also unlocked many obvious benefits as the company looks to capture revenue from viewers who were potentially watching without an individual subscription.
Netflix's sales growth has remained rock-solid, posting double-digit percentage YoY growth in six consecutive periods.
Eaton Breaks Records
Eaton's results were fantastic, with the company posting record Q1 adjusted EPS of $2.72 (up 13% YoY), record Q1 sales of $6.4 billion (up 7% YoY), and record segment margins of 23.9% (80 bp increase YoY). Further, organic sales growth totaled 9%, above the high end of previous guidance. ETN topped off the results by raising its organic revenue growth guidance for its current fiscal year.
Backlog growth within its Electrical segment improved 6% year-over-year, whereas its Aerospace backlog also enjoyed a 16% surge from the year-ago period. The company's top line has shown solid, consistent growth, as shown below.
In addition to consistent sales growth, the company has shown a nice commitment to increasingly rewarding shareholders, sporting a 7% five-year annualized dividend growth rate. As shown in the annual chart below, ETN's dividend growth has remained strong not just over the last five years, but over the last decade overall.
Please note that the final value in the chart below is tracked on a trailing twelve-month basis, as the company's current fiscal year hasn't ended yet.
Centene Raises Outlook
Adjusted EPS of $2.90 and sales of $46.6 billion from Centene blew away our consensus estimates, with earnings up a strong 28% year-over-year. Higher than expected membership growth led the company to up its 2025 premium and service revenues guidance by $6.0 billion, which already improved by a strong 17% YoY throughout the quarter.
As shown below, Centene's sales have remained strong over recent periods, with the most recent period reflecting a notable acceleration. The company also maintained its current year EPS guidance, providing investors with a nice sense of stability in an anxious setting.
Analysts adjusted their current year sales expectations accordingly following the release and guidance upgrade, with Centene now expected to post $179.6 billion in revenues in its current fiscal year. The stock also sports a favorable Zacks Rank #2 (Buy).
Bottom Line
The 2025 Q1 earnings season is slowly grinding down, with the majority of S&P 500 companies already delivering their results. The period has been positive so far, with all three companies above posting robust results and either reaffirming or raising their guidance.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Netflix, Inc. (NFLX): Free Stock Analysis Report
Eaton Corporation, PLC (ETN): Free Stock Analysis Report
Centene Corporation (CNC): Free Stock Analysis Report
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