It’s been a tough few months for Netflix (NFLX) investors. After it reached all-time highs last June, a rare subscriber miss and a late-year stock market correction toppled the highflier, which has lost more than a third of its value. On the bright side, the stock closed the year up 40% — far outpacing the 6% loss of the S&P 500.
Netflix will have an opportunity to reverse course when the company releases fourth-quarter results after the market closes on Thursday, January 17. To help you prepare, here is what Monness top analyst Brian White is expecting:
“We believe Netflix will at least meet our 4Q:18 revenue estimate of $4.199 billion (up 28% YoY; Street at $4.207 billion) and EPS projection of $0.23 (Street at $0.24). Our 4Q:18 forecast calls for a 5% QoQ rise in sales, below the four-year average of up 7% for past December quarters. Recall, Netflix’s 4Q:18 outlook calls for revenue of $4.199 billion and EPS of $0.23 […] We are projecting global streaming net additions of 9.39 million QoQ to 146.5 million in 4Q:18, up 25% YoY. This includes international net additions of 7.60 million QoQ to 86.2 million in 4Q:18 for 37% YoY growth and domestic net additions of 1.79 million to 60.3 million for 10% YoY growth. This equates to 4Q:18 domestic streaming revenue of $1.995 billion (up 22%) and international streaming sales of $2.119 billion (up 37%) for total streaming revenue of $4.114 billion (up 29%).”
Bottom line: “Given last year’s volatile quarterly results and stock price, we approach each Netflix’s earnings report with a healthy level of trepidation. In the long run, we believe a combination of engaging new content, momentum overseas, pricing flexibility and a proven model that is successfully scaling globally will provide for healthy growth for years to come.”
According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, 5-star analyst Brian White has a yearly average return of 17.9% and a 65% success rate. White has a -10.1% average loss when recommending Netflix, and is ranked #40 out of 5,120 analysts.
Wall Street seems to be confident in backing this streaming giant, with TipRanks analytics showcasing NFLX as a Buy. Based on 36 analysts polled in the last 3 months, 25 rate a Buy on NFLX stock while 9 rate it Hold and 2 Sell. The 12-month average price target stands at $386.26, marking a near 21% upside from where the stock is currently trading. (See NFLX’s price targets and analyst ratings on TipRanks)