Netflix pops ahead of earnings -- here's what to expect from its report

  • Netflix is scheduled to report earnings after the closing bell Monday.
  • The streaming giant is expected to post modest growth at home in the US, and even more from abroad.

Shares of Netflix rose 2.6% Monday morning ahead of its scheduled fourth quarter earnings report after the closing bell, signalling investor confidence in the streaming giant.

Wall Street analysts polled by Bloomberg expect Netflix to report earnings of $US0.504 per share on revenue of $US3.277 billion.

Netflix has been growing faster internationally than in the US in recent quarters. It’s expected to add 1.29 million domestic streaming subscribers and 5.05 million internationally, according to estimates compiled by Bloomberg. But this quarter will be a test, as more and more competitors – the largest being Disney – announce competing streaming platforms and remove their content from Netflix.

“Growth in older markets appears to be plateauing albeit sustaining at a very high level,” UBS analyst Eric Sheridan said last week. “With Netflix’s price increase going into effect in Q4, sub momentum (in the form of both gross adds & any resulting impact on churn) can be viewed as supportive of the platform’s pricing power.”

The growth has been fuelled by mega-hits like Netflix original “Stranger Things 2.” UBS says new shows from last quarter, namely “Ozark” and “Mindhunter,” can generate just as much subscriber excitement as hits like “House of Cards” or “Narcos.”

Millennials are similarly bullish ahead of Netflix’s earnings report. Investors on the free stock trading app Robinhood are buying shares 20% more often than they sold them. Netflix is the 16th-most popular stock on the millennial-focused app.

Wall Street analysts have an average price target of $US232 for Netflix – 4.5% above where shares opened Monday.

This post will be updated…

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