Trending now: Netflix's forecast as competition heats up

FILE PHOTO: The Netflix logo is seen on a TV remote controller in this illustration photo taken January 20, 2022. REUTERS/Dado Ruvic/Illustration

(Reuters) - Netflix Inc is expected to report its slowest quarterly revenue growth in nearly eight years on Tuesday, but the focus will be on its forecast in the run-up to new seasons of popular titles including "Stranger Things" and "Ozark".

The company is spending billions to bring more original films and TV shows, as well as build mobile games in an effort to add subscribers in a post-pandemic world where it is grappling with competition from HBO Max, Inc and Walt Disney.

Netflix could lose about a million subscribers due to its Russia exit, analysts have indicated.

Analysts expect Netflix to add 2.6 million subscribers in the first quarter and 2.7 million in the seasonally weak second quarter, according to Refinitiv data, still below the average number of subscribers it added during the peak of the pandemic.

Analysts say the company's subscriber growth will come from developing regions where it has cut prices, while increased prices in the United States and Canada would fund new content.

"Longer-term, most investors struggle to see the catalyst for a major re-acceleration in net additions in FY23 or beyond," Dan Morgan, Senior Portfolio Manager at Synovus Trust, said.

GRAPHIC: Netflix's revenue growth over nearly eight years

GRAPHIC: OTT platforms viewer share in the U.S.


Netflix has bought three gaming studios to diversify sources of revenue, but analysts do not expect a big bump from that soon.

"We are not very convinced that users will really view video games as anything other than a minor feature," Morningstar analyst Neil Macker said, adding the effort is just a "distraction" from its core business.

Netflix's most formidable challenger is Disney+, which launched in late 2019 and expects to have about 230 million to 260 million subscribers over the next two years. Platforms like HBO Max, Apple TV+ and Amazon Prime have also seen a significant growth in subscribers.

And while Netflix has had several Academy Award nominations in the past, Apple became the first streaming company to win a Best Picture Oscar for "CODA".



* Analysts estimate Netflix's first-quarter revenue to grow 10.7% to $7.93 billion when it reports results on April 19

* Earnings per share is estimated at $2.90

* The stock has lost 43.4% of its value this year, making it the worst performing FAANG stock


* 25 out of 46 analysts rate the stock "buy" or higher, while 18 have a "hold" rating and three rate it as a "sell" or lower

* The median price target is $500; prior to Q4 earnings PT on stock was $700.

** NFLX trading at $334.17 currently



Dec. 31 2021 0.82 1.33 Beat

Sep. 30 2021 2.56 3.19 Beat

Jun. 30 2021 3.16 2.97 Missed

Mar. 31 2021 2.97 3.75 Beat

Dec. 31 2020 1.39 1.19 Missed

Sep. 30 2020 2.14 1.74 Missed

Jun. 30 2020 1.81 1.59 Missed

Mar. 31 2020 1.65 1.57 Missed

(Reporting by Eva Mathews and Nivedita Balu in Bengaluru; Editing by Arun Koyyur)

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3
Subscribe now to our Premium Plan for an ad-free and unlimited reading experience!


Next In Tech News

99 Web domains illegally streaming sports, Korean drama blocked in S’pore
Siemens automates design process for testing new chips with advanced packaging
Samsung to lure 175 million existing India customers with cashback card
UK may fine TikTok $29 million for failing to protect children's privacy
Digital nomad hotspots grapple with housing squeeze
Americans have always bought too much car. Now they’re doing it with EVs
Apple’s Pay Later service may be delayed until next year
Explainer: NavIC, India’s home-grown alternative to the GPS navigation system
Google says shared network costs is 10-year-old idea, bad for consumers
India’s push for home-grown navigation system jolts smartphone giants

Others Also Read