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What To Expect In Netflix's Q1 Earnings Report

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What To Expect In Netflix's Q1 Earnings Report
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Netflix, Inc. (NASDAQ: 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.

Image credit: Matthew Keys, Flickr

Latest Ratings for NFLX

DateFirmActionFromTo
Oct 2018Raymond JamesMaintainsOutperformOutperform
Oct 2018Imperial CapitalMaintainsOutperformOutperform
Oct 2018BuckinghamMaintainsUnderperformUnderperform

View More Analyst Ratings for NFLX
View the Latest Analyst Ratings

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