Netflix Earnings Preview: A Profit Rebound and Soaring Sales Anticipated

As the anticipation builds ahead of Netflix's fourth-quarter results, investors and analysts are poised to dissect the streaming giant's performance, especially considering its remarkable lead with over 247 million paying subscribers.

In the wake of a robust third quarter, where Netflix showcased its dominance, the market is eager to witness whether the company can maintain its momentum. In this blog post, we'll delve into what analysts are expecting, the key metrics to watch, and the factors driving Netflix's growth.

Financial Projections:

Analysts, as per FactSet projections, expect Netflix (NFLX) to report adjusted earnings of $2.22 per share, a significant surge from the 12 cents per share reported the previous year. Netflix has been on a profitable streak over the past four quarters, amassing $4.5 billion in profit, a noteworthy accomplishment in an industry where competitors faced losses.

Revenue:

The FactSet consensus places the revenue projection at $8.72 billion, marking an increase from the previous year's $7.85 billion. This growth in revenue is indicative of Netflix's continued efforts to solidify its position in the highly competitive streaming market.

Stock Movement:

Netflix's shares have demonstrated resilience, climbing 36% over the last 12 months, outpacing the S&P 500, which recorded a 21% increase over the same period. This highlights investor confidence in Netflix's ability to navigate challenges and deliver consistent returns.

Analyst Sentiment:

Of the 50 analysts tracking Netflix shares on FactSet, 30 have buy ratings, 17 have hold ratings, and three recommend selling. The average price target stands at $492.79, reflecting a positive outlook tempered with cautious assessments.

Key Areas to Monitor:

1. Advertising-Supported Service: Analysts are eyeing Netflix's advertising-supported service as a potential growth driver. The service's accelerating growth trajectory has led Oppenheimer analyst Jason Helfstein to suggest substantial room for subscription growth in 2024. His optimistic outlook is supported by a raised price target of $600.

2. Subscriber Additions: The market will closely watch Netflix's net additions, with Helfstein adjusting his fourth-quarter estimates to over 10 million and his 2024 additions projection to more than 24 million. Subscriber growth remains a pivotal metric as Netflix seeks to expand its global user base.

As Netflix prepares to unveil its fourth-quarter results, the spotlight is on the streaming giant to demonstrate its resilience, innovation, and capacity for sustained growth. Analysts and investors alike are keenly observing how Netflix navigates the evolving landscape of streaming services and whether it can continue to outpace its competitors. The earnings call is not just a financial update but a crucial moment for assessing Netflix's strategic direction and its ability to stay ahead in the dynamic world of digital entertainment.