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- Netflix shares have soared over the last year.
- Expectations remain high for subscriber growth and customer monetization by the streaming giant.
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Streaming giant Netflix Inc NFLX is set to report second-quarter financial results after market close Wednesday, July 19. Here’s a look at what analysts expect from the company that was just nominated for 103 Emmy Awards.
Earnings Estimates: For the second quarter, Netflix is expected to report $8.28 billion in revenue, according to data from Benzinga Pro.
The company reported revenue of $7.97 billion in last year’s second quarter.
Guidance from Netflix calls for second-quarter revenue to hit $8.24 billion.
Netflix is expected to report earnings per share of $2.84 according to data from Benzinga Pro. The company reported $3.20 in earnings per share last year in the second quarter.
Guidance from Netflix calls for second-quarter earnings per share of $2.84.
Netflix reported revenue of $8.16 billion and earnings per share of $2.88 in the first quarter.
Netflix has beaten analyst estimates for earnings per share in six of the last seven quarters. Revenue has come in shy of analysts' estimates in recent quarters. After eight straight beats on revenue, the company has now missed revenue estimates from analysts in four of the last six quarters.
Subscriber Growth: Netflix ended the first quarter with 232.5 million global paid subscribers, up 4.9% year-over-year. The company added 1.75 million net new paid subscribers.
Netflix said during the first quarter earnings results that it was seeing engagement "above our initial expectations" for the ad-supported tier.
The company also said it was seeing account additions from the password-sharing crackdown, which would lead to a revenue benefit in the second and third quarters.
Netflix said it would continue to focus on new plans and different price points around the world to help satisfy customer needs.
“As we improve our member experience with more must-watch stories, we also need to improve our monetization. This will not only help reaccelerate revenue growth and increase operating margin, it will also enable us to invest more in great entertainment,” the company said.
Among the key topics analysts and investors will be looking at in the second quarter include subscriber figures, comments on the ad-supported plan, password-sharing monetization and the impact of the writers and actors strike.
Netflix is one of the first media companies to report in the wake of the Hollywood work stoppage, which could indicate how well the company is positioned to sustain content production throughout an extended strike.
Related Link: Double Strike In Hollywood, Actors And Writers United In Work Stoppage
What Analysts are Saying: Guggenheim analyst Michael Morris sees ad-supported plans and the shift to paid plans from those sharing accounts driving the second quarter.
Morris, who has a Buy rating and a $500 price target on Netflix stock, said that download data from Apptopia shows what could be in store for the second quarter.
“Our review of Apptopia download data, detailed within, indicates global average daily downloads increased 7% in June compared to +1% month-over-month in May, -3% month-over-month in April,” Morris said.
The analyst said Netflix daily downloads have lifted since the company rolled out its paid sharing launch on May 23.
Morris expects Netflix to report net adds of 2.6 million global paid subscribers in the second quarter.
Wells Fargo analyst Steven Cahall is raising full fiscal year earnings estimates for Netflix ahead of earnings. The analyst has an Overweight rating and a price target of $500 on shares.
“We’re raising #s into the print for NFLX, but also note very high buyside expectations,” Cahall said.
The analyst said investors might consider buying Netflix in the event of a pullback based on the long-term outlook.
“While NFLX has scaled subscribers globally, it’s earlier in delivering price increases. Engagement suggests it has plenty of pricing power ahead, but competition and content success remains critical components of the pricing strategy.”
Wedbush analyst Michael Pachter has an Outperform rating and a $475 price target on Netflix. The stock is on Wedbush’s Best Ideas List.
Pachter sees a balance of content and costs that can lead to increased profitability for Netflix. The company’s ad-supported tier and crack down on password sharing could also boost profitability for the company going forward.
The analyst estimates second-quarter revenue of $8.24 billion and earnings per share of $2.84.
NFLX Price Action: Netflix shares trade at $459.93 at the time of writing, versus a 52-week trading range of $188.40 to $456.68. Shares of Netflix are up 53% year-to-date in 2023 and up over 130% in the last 52 weeks.
Netflix shares traded at $332.59 after the company reported first-quarter financial results previously.
Read Next: Netflix Launching Zombie Reality Series, Here's Why A Contestant Says 'We're Going To Die'
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