What to Expect When Netflix Reports After the Close

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Netflix Inc. (NASDAQ: NFLX) is scheduled to release its first-quarter financial results after the markets close on Monday. The consensus estimates from Thomson Reuters call for $0.64 in earnings per share (EPS) on $3.69 billion in revenue. The same period of last year reportedly had $0.40 in EPS and revenue of $2.64 billion.

Excluding Monday’s move, Netflix has vastly outperformed the broad market, with its stock up 116% in the past 52 weeks. In just 2018 alone, the stock was up roughly 62%.

Earlier in February, Chief Financial Officer David Wells announced that Netflix would spend $8 billion on around 700 new original projects in 2018. Netflix’s plan includes 80 original movies and 80 original foreign-language productions, along with a multitude of new episodes of existing and new English-language programming and one-off specials.

In its most recent quarterly report, Netflix registered global net additions of 8.3 million, the highest quarter in its history and up 18% compared to last year’s record 7.05 million net adds. This exceeded the 6.3 million forecast, due primarily to stronger than expected subscriber acquisitions, fueled by its original content slate and the ongoing global adoption of internet entertainment.

Merrill Lynch recently reiterated a Buy rating and a $300 price objective. Its earnings preview noted this:

Heading into 1Q earnings, expectations are high, as the stock has appreciated +47% YTD. Netflix ended 2017 on a high note, reporting higher international net adds than in any other quarter (+6.4mn). For 1Q, we expect Netflix to report international net adds of 4.95mn and domestic net adds of 1.46mn. Like 4Q, we expect stock performance post 1Q earnings will be dependent on the strength of international net adds and 2Q18 guidance. Continued subscription momentum in international markets is key to the valuation and driving the stock higher from here.

A few other analysts weighed in on Netflix ahead of the report as well:

  • Aegis has a Hold rating with a $230 price target.
  • BMO Capital Markets has a Hold rating and a $310 price target.
  • Buckingham Research has a Neutral rating with a $277 target.
  • Wells Fargo has an Outperform rating with a $435 target price.

Shares of Netflix were last seen down 1.6% at $306.53, with a consensus analyst price target of $286.62 and a 52-week range of $138.66 to $333.98.