Can Binge-Watchers Keep Up With The Market?

Photo Credit: Global Panorama 

Netflix has some interesting stats to pay attention to this quarter. There is a 13% difference in Estimize and Wall Street’s EPS estimates for FQ2’17, $0.18 and $0.16 respectively. However, both platforms pretty much agree on NFLX’s revenue for this quarter; Estimize predicting $2,764M and The Street estimating $2,759M in revenue. Likewise, NFLX has beaten Estimize 83% of the time and Wall Street 78% of the time, suggesting this is a company that will likely beat on the bottom line again this quarter.

(Click on image to enlarge)

(Click on image to enlarge)

In early 2016, Netflix has expanded to 190 countries globally and is predicted to penetrate those markets similarly to the way it has done in the US. Not only is this good in the present, but it also implies there is significant room for growth in the future. When NFLX acquires more up to date and better content, they are likely to acquire more subscribers as well. To continue the cycle, the increase in subscribers provides the funds to keep incorporating new content.

Even more so than earnings and revenue actuals, it’s number of subscribers that Netflix investors care about each quarter. For Q2 the Estimize community anticipates total streaming subscribers will hit 103M, a 23% increase from the year-ago quarter. Net subscription additions from the US are expected to total 731,960, and increase of 352% YoY, while international additions are estimated at 2.7M, an 81% increase.

Another interesting thing to consider regarding NFLX is the amount of shared passwords among different households that is a recurring issue for the company. We have all done it and are all guilty of it; borrowing someone else’s Netflix password either when all our devices are occupied or if we do not have a subscription of our own. Approximately 24% of teens and 12% of adults surveyed have admitted to doing so, according to a study done by Reuters, this phenomenon suggests that media companies will be missing out on significant revenue. Despite this trend, Netflix is approximated to grow EPS by 108% in Q2 revenues by 31% YoY.

Disclosure: There can be no assurance that the information we considered is accurate or complete, nor can there be any assurance that our assumptions are correct.

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Chee Hin Teh 6 years ago Member's comment

Thanks sir for sharing