What To Expect In Netflix's Q1 Earnings Report

Netflix, Inc. NFLX is scheduled to report its first quarter results on Monday and expectations are high based on the options market, which is pricing in a 10 percent move in either direction.

The company is expected to post earnings of 64 cents per share on sales of $3.69 billion. The stock was trading around $312 late Friday afternoon.

Here's a summary of what analysts are saying ahead of the print.

Rating And Price Target

• Buckingham Research Group's Matthew Harrigan: Neutral rating, upside case of $353 and a downside case of $159.
• Stifel's Scott Devitt: Hold rating, $325 price target.
• Wedbush's Michael Pachter: Underperform rating, $110 price target.
• KeyBanc Capital Markets' Andy Hargreaves: Overweight rating, $300 price target (under review pending results).
• Goldman Sachs' Heath Terry: Buy rating, $360 price target.
• Morgan Stanley's Benjamin Swinburne: Overweight rating, $350 price target.
• Aegis Capital's Victor Anthony: Hold rating, $230 price target.
• Deutsche Bank's Bryan Kraft: Buy rating, $350 price target.

What Wall Street Is Saying

Buckingham

• Harrigan is modeling Netflix to earn 62 cents per share in the first quarter on revenue of $3.684 billion.
• Netflix likely added 6.4 million net new global users.
• Netflix benefited from new shows like "Jessica Jones" and a soft Winter Olympic ratings.
• Expectations for continued upside to subscriber addition estimates has already flowed into the stock.
• Netflix stock is up nearly 200 percent over the past two years, which creates a "between price action and intermediate estimates."

Stifel

• Devitt is modeling Netflix to earn 63 cents per share on revenue of $3.6928 billion.
• Netflix should show it added 1.47 million net domestic subscribers and 4.94 million net international subscribers.
• Revenue growth of 40.1 percent year-over-year is attributed to the late 2017 price hike.
• Investors should look out for updates relating to the full year free cash flow and margin outlook.

Wedbush

• Pachter is modeling Netflix to earn 65 cents per share on revenue of $3.7 billion.
• Netflix likely added 1.5 million net domestic subscribers and 5.25 million net international subscribers.
• A "steady stream" of new global content helped mitigate churn.
• Despite expectations for strong subscriber additions, financial and competitive risks remain equally "concerning" now as it has been in the past.

KeyBanc

• Hargreaves is modeling Netflix to earn 63 cents per share on revenue of $3.68 billion.
• Netflix's global subscriber net additions could come in between 7 million and 7.3 million.
• Netflix has beaten its own subscriber net addition guidance in 10 of the past 12 quarters.

Goldman Sachs

• Terry is modeling Netflix to earn 63 cents per share on revenue of $3.7 billion.
• Netflix likely added 1.7 million net subscribers in the U.S. market and 5.6 million international net subscribers.
• Incremental marketing spend will likely result in marketing deleverage of 320 basis points from a year ago.
• Cash burn is expected to grow from $2 billion in the full year 2017 to $3 billion for the full year 2018.

Morgan Stanley

• Swinburne is modeling Netflix to 63 cents per share on revenue of 3.6856 billion.
• Netflix may have added 1.45 million net U.S. subscribers and 4.9 million net international subscribers.
• Netflix's approximate 120 million global subscriber base implies it's very much in the "early stages" of a global growth.
• Netflix's total addressable market excluding China stands at more than 600 million broadband homes and continues to grow.

Aegis

• Anthony is modeling Netflix to 64 cents per share on revenue of $3.71 billion.
• Netflix may have added 1.65 million net U.S. subscribers and 6 million international net subscribers.
• Netflix's second quarter is up against a "tough" content slate comparison, which may lead to a "less robust" guidance.
• The analyst is modeling 1.5 million domestic net additions and 5.5 million international net additions in the second quarter.
• The company also needs to show progress on operating margin expansion and reassure investors cash burn would ease.

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