M Science Is Bullish On Netflix Heading Into Q3 Earnings Print

After two consecutive horrible quarters for Netflix, Inc. NFLX, M Science analysts have high hopes for the streaming company when it releases Q3 earnings next week.

M Science’s checks suggest that Netflix’s domestic subscriber numbers, which have been the companies Achilles heel the past two quarters, may have reached an inflection point.

The firm is now calling for net domestic subscriber additions of 150,000 in Q3, up from previous expectations of 0.

M Science also found that Netflix registered positive year-over-year gross adds in September for the first time since October 2015.

“Data indicates a reduction to NET churn among our cohort of grandfathered subscribers in September (indicating returns) coinciding with a broader increase in gross adds in the month,” M Science notes.

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In addition, the firm predicts Netflix could deliver upside in international subscriber growth in Q3 as well.

Still, no matter how good Netflix’s Q3 numbers are, M Science believes the most critical part of the Q3 report will be Q4 guidance.

M Science adds that there still seems to be a real possibility of a Netflix buyout as well.

Netflix shares are up 1 percent in early Friday trading but remain down 11.5 percent in 2016.