What to Watch in Netflix Earnings After the Close

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Netflix Inc. (NASDAQ: NFLX) is scheduled to release its fourth-quarter financial results after the markets close on Thursday. The consensus estimates from Thomson Reuters call for $0.24 in earnings per share (EPS) and $4.21 billion in revenue. In the same period of last year, it posted EPS of $0.41 on $3.29 billion in revenue.

24/7 Wall St. has tracked multiple analyst calls, and the expectation sure looks to be that Netflix is being set up to be the king of earnings season for January. That is at least what a short gain of this sort suggests. That said, if Netflix has poor guidance or very disappointing metrics, then there will be hell to pay in its share price.

Just a couple days ahead of the report Netflix, announced that it would be raising its prices. The price hikes will phase in over the coming months for existing subscribers but will become effective immediately for new subscribers.

Specifically, Netflix is raising its prices by 13% to 18%. Its most popular monthly service plan will rise to $12.99 from $10.99. The base plan will increase to $8.99 from $7.99, and the premium plan will rise to $15.99 from $13.99.

It’s worth pointing out that these are the biggest price hikes ever made by Netflix for its streaming service, and this will result in an additional $1.4 billion in additional domestic sales, if all of Netflix’s 58 million subscribers stick with their current plans after the price hike.

Here’s what analysts had to say about Netflix ahead of the report:

  • Barclays has a Buy rating with a $375 price target.
  • Sanford Bernstein has a Buy rating and a $421 price target.
  • Goldman Sachs has a Buy rating with a $400 price target.
  • JPMorgan has an Overweight rating with a $425 price target.
  • Wedbush’s Sell rating comes with a $150 price target.
  • Morgan Stanley has an Overweight rating and a $430 target.
  • Raymond James has a Strong Buy rating and a $450 target.
  • Nomura has a Neutral rating with a $300 price target.

So far in 2019, Netflix has vastly outperformed the broad markets, with its shares up about 31.3%. In the past 52 weeks, the stock is up nearly 59%.

Shares of Netflix were last seen trading at $350.74, in a 52-week range of $216.55 to $423.21. The consensus analyst price target is $380.95.

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