What To Expect In Netflix's Q1 Earnings Report

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.

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