As of this writing, Netflix shares were trading at nearly $540, a 26% increase from six months ago. That might sound like a lot, but a comparison to past quarters should provide some perspective. To be clear, Netflix’s paid memberships are still growing, but that growth has decelerated, especially when compared to this year’s early surge. Despite the controversy surrounding French film Cuties and a peak in Netflix cancellations in September, Q3 saw negative growth in cancellations; both Quarter-over-Quarter (-10.3%) and Year-over-Year (-27.5%). Analysts were expecting earnings of $2.13 per share and revenue of … For latest tech news in your inbox, once a day! David Moadel has provided compelling content – and crossed the occasional line – on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. PS5 and Xbox Series X/S to Have Netflix, Disney+, and Other Major Streaming Apps at Launch. On … Yahoo ist Teil von Verizon Media. Für nähere Informationen zur Nutzung Ihrer Daten lesen Sie bitte unsere Datenschutzerklärung und Cookie-Richtlinie. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets. 2020, the year of the novel coronavirus, has been particularly generous to Netflix shareholders. Tesla's latest quarterly numbers beat analyst expectations on both revenue and earnings per share, bringing in $8.77 billion in revenues for the third quarter. As of Sept. 30, Netflix reported 195.15 million paid streaming customers worldwide, up 23.3% year over year. As I alluded to earlier, long-term Netflix stock holders have enjoyed considerable profits. Wir und unsere Partner nutzen Cookies und ähnliche Technik, um Daten auf Ihrem Gerät zu speichern und/oder darauf zuzugreifen, für folgende Zwecke: um personalisierte Werbung und Inhalte zu zeigen, zur Messung von Anzeigen und Inhalten, um mehr über die Zielgruppe zu erfahren sowie für die Entwicklung von Produkten. If you’re willing to risk it, you might find that muted expectations should (hopefully) work in your favor. It’s a wellspring of revenues that must be replenished constantly. Netflix’s splashy Q3 lineup can’t stave off an expected slowdown. On the film side, Charlize Theron’s The Old Guard, Millie Bobby Brown’s Enola Holmes and Jamie Foxx’s Project Power all goosed Q3 viewership as well. Recently, Disney (NYSE:DIS) embarked on a major reorganization effort, with streaming becoming its “primary focus” when it comes to entertainment. I have a theory about what’s happening here, and it’s profoundly cynical. As an illustration, the bank hiked its Netflix stock price target from $600 to $630, citing "short and long-term benefits" from the pandemic-related changes. Daten über Ihr Gerät und Ihre Internetverbindung, darunter Ihre IP-Adresse, Such- und Browsingaktivität bei Ihrer Nutzung der Websites und Apps von Verizon Media. Netflix noted that its free cash flow was positive for a third consecutive quarter, coming in at $1.1 billion (versus -$551 million in Q3 of 2019). Nasdaq The onset of the coronavirus has made certain already expensive stocks even more expensive. Subscribe to Observer’s Keeping Watch Newsletter. The company earned $790, million, or $1.74 per share, in the third quarter, up 19% from $665 million, or $1.47 per share, a year earlier. For the entire FY 2020, the company now expects an operating margin of 18 percent and a growth in the subscriber base by a record 34 million. Thus, the price of Netflix shares started the year at around $330 and in mid-October, it’s easily above the $500 level. On the other hand, we’re not living in a traditional world and 2020 seems to be the exception to every rule our parents and grandparents knew. Moreover, the analyst Benjamin Swinburne postulated that Netflix’s competitive moat is "perhaps deeper than ever". Since mid-March, according to the company, it has already completed principal photography on more than 50 productions and “we’re optimistic we will complete shooting on over 150 other productions by year-end.”. For Q4 2020, Netflix expects net additions to its subscriber base of 6.0 million. The company had previously forecast adding 2.5 million paid streaming customers in the third quarter, after record net adds of 10.1 million in Q2 and 15.8 million in Q1 this year — a massive lift Netflix attributed to stay-at-home orders amid the coronavirus crisis. All rights reserved. As has been its practice, Netflix also released self-reported viewing metrics for its biggest releases in the quarter. Today’s earnings come in the wake of a significant endorsement by Morgan Stanley on the 16th of October. But with an earnings event approaching fast, is it time to take profits? The company said it is making “good and careful progress returning to production.”, Netflix said it has restarted production on originals including “Stranger Things” Season 4, action film “Red Notice” starring Dwayne Johnson, Gal Gadot and Ryan Reynolds, and “The Witcher” Season 2. This was followed by Amazon’s (NASDAQ:AMZN) Prime Video service at 16 percent, AT&T’s (NYSE:T) HBO Max at 11.3 percent, Hulu at 9.5 percent, Disney Plus at 9.1 percent, Netflix at 8.3 percent, and then Apple TV Plus (NASDAQ:AAPL) at 4.9 percent. Still, Netflix did provide markedly muted guidance in regard to the its projected third-quarter net new subscriber count. 1125 N. Charles St, Baltimore, MD 21201. Subscriber count is all-important, and Netflix is bracing investors for bad news on this front. We are a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com. Shares were down 6% in after-hours trading. © Copyright 2020 Variety Media, LLC, a subsidiary of Penske Business Media, LLC. While he was at it, Terry hiked his target price on Netflix stock from $600 to a very ambitious $670. The company provided weak subscriber growth guidance for the third quarter, saying, "growth is … As Morgan Stanley analyst Benjamin Swinburne put it, “We continue to see short- and long-term benefits to Netflix growth and earnings power due to the changes brought on by the pandemic.”. If the new subscribers are drying up, does this mean that Netflix is in trouble? Netflix said it still expects to launch more originals in each quarter of 2021 than this year, even with COVID production suspensions. While fewer people canceled their subscriptions over … Similarly, Goldman Sachs analyst Heath Terry increased his forecast to 6 million quarterly net new subscribers. As commentators and market participants gear up for the next wave of earnings releases, Netflix is among the most prominent names on the roster. All Rights Reserved. Sign up for free newsletters and get more CNBC delivered to your inbox. © 2020 CNBC LLC. After a deluge of activity in the first half of 2020, Netflix is now facing what is likely its slowest quarterly growth since Q2 2018. So, as long as the bulls are in control, it’s probably not a great idea to bet against Netflix. Specifically, I suspect that Netflix is deliberately lowballing its forward guidance. It’s tempting, no doubt, to take some shares of Netflix off the table after its multi-year run-up. 2020 InvestorPlace Media, LLC. Netflix reported slowing subscriber growth in its third-quarter earnings report on Tuesday after the bell but Wall Street analysts said it's a buying opportunity. Get this delivered to your inbox, and more info about our products and services. Revenue climbed 22.5% to $6.44 billion from $5.24 billion. Netflix might be able to fool some retail traders into a dour mood, but the analyst community seems to be calling the company’s bluff. Some of the analysts see right through this. The caveat: Netflix tallies views based on every account that watches a given title for at least two minutes, rather than reporting average-minute audience as is the TV industry’s standard. Bear in mind that on the 15th of October, KeyBanc had also raised its Netflix stock price target from $590 to $634, while noting that concerns surrounding the growth in the subscriber base, in the wake of the Cuties controversy, "may be overblown” and that the media landscape still "favors Netflix". On a more granular level, Netflix’s revenue and subscription growth breaks down geographically as follows: Intel (INTC) Q3 2020 Earnings – Investors Hammer the Company for Providing Muted Guidance and Pausing the Share Buyback Program, (All revenue figures are in billions of dollars; all net adds are in millions). And to be honest, there’s nothing wrong with “knowing when to say when.” After all, an earnings announcement could cause the share price to fall sharply. The company had guided to net additions of 2.5 million while reporting its earnings for Q2 2020. Moreover, Netflix reported operating cash flow of $1,264 million during Q3 2020. Article printed from InvestorPlace Media, https://investorplace.com/2020/10/low-expectations-set-netflix-stock-up-for-a-post-earnings-pop/. It’s definitely worth noting that the stock’s trailing 12-month price-to-earnings ratio is 89.53x. But Who’s Buying? Netflix’s growth in the third quarter cooled considerably after its blockbuster COVID-fueled bump in the first half of 2020. In third quarter of 2019, SimilarWeb estimated that Netflix’s international subscribers grew by an estimated 37%, which was in line with the 35% bump the company reported outside of the U.S. and Canada in its official numbers. Sie können Ihre Einstellungen jederzeit ändern. 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