Netflix Could Guide 2017 Net Streaming Adds To 17 Million

With Netflix, Inc. NFLX scheduled to report its first-quarter 2017 results after the close on April 17, analysts have been busy estimating how the company might have fared during the quarter. An article on the Motley Fool stating that interest in the quarterly numbers appears to have soared, following the announcement of Netflix’s global expansion in January 2016.

Strong International Growth

Several analysts have predicted over the past month that Netflix’s international growth is likely to have been stronger than expected in Q1, while others believe domestic net additions are likely to slow down.

Of note, Loop Capital’s David W. Miller said in a research report that the company has been effectively using its “recommendation engine” to drive new additions in Latin America and continental Europe.

The analyst maintains a Buy rating on Netflix, with a price target of $167.

The company had guided to international subscribers of 3.7 million for Q1 2017, which most analysts appear to agree with, although some believe that Asia might have been slower in adopting Netflix than continental Europe and Latin America.

Beat Expectations

On the other hand, some analysts, including Deutsche Bank’s Bryan Kraft and Jefferies’ John Janedis believe that the company might post an upside to the guidance. Both analysts based their conclusion on data from various countries, including Germany, France, Italy, Poland, Spain, Switzerland, Brazil, Mexico and India.

With a track record of beating its guidance, missing only twice over the past 14 quarters, Netflix guided to domestic subscriber additions of 1.5 million and international additions of 3.7 million, leading to a total of 5.2 million subscriber additions for the quarter.

Miller, on the other hand, believes that the company is likely to report its revenue and EPS for Q1 2017 mostly in line with the consensus while agreeing with Kraft and Janedis that the international subscriber additions are likely to beat the guidance.

Miller explained that the international subscriber addition beat is likely to have been driven by robust traction in Europe, along with an uptrend in Latin America due to the popularity of the Brazilian series “3%.”

Related Links: Can Teen Sentiment Inform Stock Picks?

A Preview Of Netflix's Q1 Earnings: Q2 Sub Guidance Could Be At Risk