Tuesday's Market Minute: Netflix (NFLX) Earnings Preview

Netflix NFLX reports earnings after the bell today, with Zacks expecting earnings per share of $2.11 and revenue of $7.85 billion for its third quarter. This is lower on the top and bottom line than the figures they reported for the last two quarters. 

The stock has plunged around 60% YTD after subscriber numbers disappointed. However, Netflix recently announced that it would launch an ad-supported tier in November. While this won’t impact today’s report, investors may still feel more positive on the stock because of this plan and will be listening for executive commentary surrounding it. Netflix also forecasts adding 1 million subscribers in this quarter after losing a net of almost 1.2 million so far this year. 

Content remains king, and Netflix is still succeeding in that area despite huge name shows like Rings of Power and House of the Dragon from competitors. With a more affordable tier (even with many consumers’ stated dislike of ads) Netflix may be able to lure subscribers back – and with its password-sharing crackdown, push more people to open their own accounts. However, growth cannot last forever; eventually Netflix will tap out its markets no matter what it does. Where will it go from there? Will investors follow? 

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