Netflix Q4 Earnings preview - what to look for

10:53, 21 January 2020

Netflix (NFLX) will announce its Q4 earnings results on Tuesday, Jan. 21, after market close, amid a very competitive environment for the on-demand streaming entertainment industry.

In the past year, Netflix (NFLX) has outperformed the EPS estimates 75% of the time, and the revenue estimates 50% of the time, surging 31,1% year over year in the third quarter to $5.25 billion. The company reported third-quarter earnings on Oct. 16, posting earnings per share of $1.47. Analysts had been expecting EPS of $1.03. Netflix added 500,000 new U.S. subscribers and 6.3 million international users last quarter—just shy of Wall Street estimates and its very own guidance. However, Netflix stock rose 2.5% the following day.

For the previous quarter, the consensus EPS estimate for Netflix stock is $0.52 (+73.3% Y/Y), and the consensus Revenue Estimate is $5.45B (+30.1% Y/Y). Wall Street analysts are bullish on the stock, with 63% having a Buy or equivalent rating, while 26% recommending a Hold. According to TipRanks the average price target is $365.85 with a high forecast of $450.00. The average price target represents a 7.71% increase from the last price of $339.67.

The company expects to add 7.6 million paid net members globally. 600,000 of those net member additions could come from its core domestic market. Traders will also look out for Netflix's guidance on subscriber growth in Q1 2020. Its outlook for the period will provide insight into how the company's member growth is trending so far in 2020.


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