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 Tuesday. The consensus estimates are $0.57 in earnings per share (EPS) and $4.5 billion in revenue. In the same period of last year, the company said it had EPS of $0.64 and $3.7 billion in revenue.

Ahead of this report, one analyst has taken on the task of projecting Netflix subscriber numbers, and as a result the firm sees more than 20% upside for Netflix going forward.

Recently, Piper Jaffray announced its latest installment in its periodic tracker of Google search interest for Netflix, which it views as a useful indicator of future subscription growth.

In January, Netflix said that it expects to see global paid memberships of roughly 148.2 million in the first quarter. This represents 8.9 million additions, or more than 6% growth. Note that this is more or less in line with Wall Street expectations.

Analyst Michael Olson commented in the report:

With only two months of data included, the index [that Piper generates using search data] is likely overstating actual sub growth (our search index typically overstates actual year-over-year sub growth). That said, it appears to suggest domestic and international sub growth could each have upside

Ultimately, Olson reiterated an Overweight rating for Netflix with a $440 price target.

Excluding Tuesday’s move, Netflix had outperformed the broad markets, with its stock up about 30% year to date. In the past 52 weeks, the stock was only up about 12%.

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

  • Deutsche Bank has a Buy rating and a $400 price target.
  • RBC has a Buy rating with a $480 price target.
  • SunTrust Banks has a Buy rating.
  • Stifel has a Buy rating with a $400 price target.
  • Credit Suisse has a Buy rating and a $440 price target.
  • JPMorgan’s Buy rating comes with a $435 price target.
  • Rosenblatt Securities has a Neutral rating and a $350 target.
  • UBS Group has a Neutral rating with a $350 price target.

Shares of Netflix were last seen up over 2% at $357.22, in a 52-week range of $231.23 to $423.21. The consensus price target is $381.79.

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