PREVIEW-Currently Trending: Netflix Predictions as Competition Heats Up

Band Eva Mathews and Nivedita Balu

April 18 (Reuters)Netflix Inc. NFLX.O is expected to report its weakest quarterly revenue growth in nearly eight years on Tuesday, but the focus will be on its forecast as new seasons of popular titles such as “Stranger Things” and “Ozark” approach.

The company is spending billions to deliver more original movies and TV shows, as well as create mobile games in a bid to add subscribers in a post-pandemic world where it struggles with competition from HBO Max . WBD.OAmazon.com Inc. AMZN.O and Walt Disney DIS.N.

Netflix could lose about a million subscribers due to its exit from Russia, analysts have said.

Analysts expect Netflix to add 2.6 million subscribers in the first quarter and 2.7 million in the seasonally weak second quarter, according to Refinitiv data, still below the average number of subscribers it has added at the height of the pandemic.

Analysts say the company’s subscriber growth will come from developing regions where it has cut prices, while price increases in the United States and Canada would fund new content.

“Longer-term, most investors struggle to see the catalyst for a major re-acceleration in net additions in FY23 or beyond,” said Dan Morgan, senior portfolio manager at Synovus Trust. .

THE CONTEXT

Netflix bought three game studios to diversify sources of replace, but analysts don’t expect a big bump anytime soon.

“We’re not very confident that users will really see video games as anything more than a minor feature,” said Morningstar analyst Neil Macker, adding that the effort is just a “distraction” from his core business.

Netflix’s most formidable challenger is Disney+, which launched in late 2019 and expects to have around 230 million to 260 million subscribers over the next two years. Platforms like HBO Max, Apple TV+ and Amazon Prime have also seen significant subscriber growth.

And while Netflix has had several Oscar nominations in the past, Apple became the first streaming company to win a Best Picture Oscar for “CODA.”

FUNDAMENTALS

* Analysts estimate Netflix’s first-quarter revenue will rise 10.7% to $7.93 billion when results are released on April 19

* Earnings per share is estimated at $2.90

* The stock has lost 43.4% of its value this year, making it the worst performing FAANG stock

WALL STREET FEELING

* 25 out of 46 analysts rate the stock “buy” or higher, while 18 have a “hold” rating and three rate it as a “sell” or lower

* The median price target is $500; prior to fourth quarter results, the PT on the stock was $700.

** NFLX is currently trading at $334.17

END OF QUARTER

REFINITIV ESTIMATE IBES

REAL

BEAT, MET, MISSED

December 31, 2021

0.82

1.33

To beat

September 30, 2021

2.56

3.19

To beat

June 30, 2021

3.16

2.97

Lack

March 31, 2021

2.97

3.75

To beat

December 31, 2020

1.39

1.19

Lack

September 30, 2020

2.14

1.74

Lack

June 30, 2020

1.81

1.59

Lack

March 31, 2020

1.65

1.57

Lack

Netflix revenue growth over nearly 8 yearshttps://tmsnrt.rs/3jQCmpc

Sharing viewer of OTT platforms in the United Stateshttps://tmsnrt.rs/3ErO4QC

Netflix vs. FAANGhttps://tmsnrt.rs/3OlWHR2

(Reporting by Eva Mathews and Nivedita Balu in Bengaluru; Editing by Arun Koyyur)

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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