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Jan. 20, 2022, 8:34 a.m. EST

As Wall Street braces for Netflix subscriber-growth miss, some want the company to stop reporting the number

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By Jon Swartz

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Stock movement:  Netflix’s stock is up 5.5% the past 12 months, while the S&P 500 index   SPX  has increased 24%. Shares of Netflix are down 17% since the company last announced quarterly results.

What analysts are saying

Despite some hand-wringing over Netflix’s new net subscriptions, optimism remains firm for revenue and earnings thanks to a strong slate of new movies and returning TV shows in the fourth quarter. “Don’t Look Up,” was viewed for a record 152.3 million hours in a single week (Dec. 27 to Jan. 2), and Netflix said it’s the second-most-watched movie ever on the service, which is expected to have an immense presence on the award circuit this year with films such as “The Power of the Dog,” “The Lost Daughter” and “Tick, Tick… Boom.” The streaming service also launched new seasons of popular shows “The Witcher,” “Emily in Paris” and “Cobra Kai” in the quarter.

What’s worth streaming? Why Netflix isn’t the top streaming target for January

“In our view, the original content released by Netflix in 4Q:21 was unprecedented and we believe this will encourage strong engagement,” Monness Crespi Hardt analyst White wrote.

White expects the company to “approach” his fourth-quarter revenue estimate of $7.74 billion and earnings of 90 cents a share. For the current first quarter, his firm is projecting sales of $8.06 billion, up 13% year-over-year, and EPS of $3.12. Analysts polled by FactSet are forecasting $8.14 billion and $3.46, respectively.

Strong content slates are expected to help Netflix maintain its subscriber base, an important goal as it faces new competition. Evercore ISI analysts recently wrote that proprietary U.S., Germany and France surveys gave them confidence in Netflix’s popularity with subscribers, and they maintained an outperform rating and $710 price target on the stock

The U.S. sampling of 1,600 people revealed that two-thirds used Netflix in the last 12 months — comparable to record high penetration in August — and 61% said they were “extremely/very satisfied” with the service, up 5% from the previous quarter. Still, one in five said they were “extremely/very likely to cancel in the next 3 months,” a potential sign of U.S. penetration edging closer to maturation.

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Not all analysts are predicting a shortfall for Netflix. Stifel analyst Scott Devitt said he expected more than 10 million new subscribers in the fourth quarter as Netflix “successfully releases compelling original content, broadens its international penetration, and enters a seasonally favorable period for sub adds.”

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