Netflix is set to release its quarterly earnings imminently, with Q3 results being closely monitored by investors. This is because the report will be the last one before it enters competition from new streaming services such as Disney and Apple.
Shares have been impacted in recent months due to factors such as concerns over subscriber growth after a number of misses in the second quarter results, along with scepticism over how Netflix will perform compared with new platforms entering the streaming industry.
Significantly, Netflix stock has lost over 20% of its value since the release of its Q2 earnings in July. This is likely due to the fact that the US subscriber decline detailed in the report was the first of its kind since 2011.
It’s expected that investors will be closely monitoring upcoming news for confirmation of whether Netflix has hit its forecast of 7 million net subscriber additions for Q3. Many Wall Street firms have lowered price targets in recent weeks, and while a number of analysts have reiterated a buy rating on its stock, they have also acknowledged the issues it could encounter going into Q4 with a higher level of competition in the sphere.
So what happened in Q3? It began with positive results, as the third instalment of popular Netflix original Stranger Things gave it a boost. Across July, August and September, there was some erratic change in terms of domestic subscriber growth. A portion of the negative change came about due to the Cancel Netflix movement, where subscribers threatened to quit the platform after original series The OA was cancelled on a cliffhanger. However, new seasons of popular shows such as Orange Is The New Black and Mindhunter followed, giving the platform the boost it needed.
While the quarter had its ups and downs, its safe to say it was still one filled with successes, and it’s likely to be a better one than Q2. If Q3 earnings reflect this, investors should be provided with renewed confidence in stock going into Q4.
According to Seeking Alpha, the Q3 consensus EPS estimate is $1.05, which is up 18% year over year. The consensus revenue estimate is $5.25 billion, which is up 31.3% year over year.
