Netflix Shares High Prior To Q4 Earnings
FSM News | Jan 17, 2017 08:34AM ET
What To Expect From Netflix (NASDAQ:NFLX)'s Upcoming Fourth Quarter Earnings Report
Prior to the release of Netflix’s fourth-quarter earnings report, shares of the subscription-based online streaming service company rose up to new highs as numerous financial firm and research groups upgraded their rating on the stock ranging from buy or hold as early as a week before the release of the earnings report.
Shares of the streaming giant jumped by as much as 0.47% a week before the release of the earnings report with the stock breaking out last January 4 on the buy upgrades from analysts.
Among the series of upgrades from analysts, Netflix was also added to JPMorgan Chase's U.S. focus list stating that the American entertainment company is next to Facebook on his list of large capital internet stock picks for the year coming in at number two.
Analysts are now expecting earnings per share of around 13 cents 30% up from their recent EPS the same quarter last year and 8% higher than the previous quarter following a rise of 29% in Netflix shares for the past quarter from October to December.
Expected revenue is also at around $2.47 billion, 35% higher from the previous year’s fourth quarter with $942 million coming from sales in international streaming and $1.39 billion coming from the subscriptions in domestic countries.
Netflix 2016 Performance Overview
Despite the bullish outlook in the upcoming earnings report from Netflix, the company faced a tough 2016 as the company was hit with a series of challenges including piracy threats caused by some of their original shows and series being exclusively distributed to certain countries or through the exclusivity of a subscription.
At the beginning of the year, the company launched the service in over 100 countries but still failed to report impressive numbers reporting only 160,000 domestic subscribers and 130,000 new viewers from the United States from an expected 300,000 additional subscribers.
Shares of the company then declined to as low as $98-$101 prior to the release of their third quarter earnings report.
Netflix also failed to reach a specific number of subscribers from what they have originally forecasted of an additional 2 million subscribers to only reporting 1.5 million during the first half of the year. Overall, new subscribers have decreased by 15% from 2015.
The company’s shares also have declined last quarter by as much as 13% after the company announced that they would be increasing their subscription prices by $20 from $7.99 to $9.99 although Netflix has assured that the increase in prices would only be implemented two years after the start of use.
In the middle of the issues faced by the company last year, the company was able to get back up on its feet with the help of the success of their original series including Stranger Things, Narcos, Daredevil, House of Cards, and Orange is the new black.
Get The News You Want
Netflix is also set to release a wave of much awaited original series this year including Marvel’s Iron Fist and Santa Clarita Diet. Another original series, A Series of Unfortunate Events has already been released and has received a myriad of positive reviews. The show also has been already renewed for a second season.
Bullish Outlook
Shares of the company rose up by 3 points or 3.5% with the shares hitting 7% higher this year and 38% higher in the past six months from recently trading down for the past five consecutive sessions. The impending release of the earnings report should lead to another rally in the next trading session and should surge higher on a positive earnings report which is widely expected from Netflix.
The company is also set to release an earnings guidance for the first quarter of 2017 where analysts are expecting a net addition of around 3.5 million to 4.5 million with an increase of 18.8% in their contribution margin for the first quarter and an additional 1.45 million members in the U.S. and more than 3 million outside the country.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.