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Netflix Long

by SignalFactory   ·  October 20, 2020 | 08:46:37 UTC  

Netflix Long

by SignalFactory   ·  October 20, 2020 | 08:46:37 UTC  

Video-streaming giant Netflix (NASDAQ: NFLX) is gearing up for a third-quarter report after market close on Tuesday, Oct. 20. This report is sure to move the market whether it’s good, bad, or ugly.

Netflix forecasts third-quarter earnings to be $2.09 per share, implying year-over-year growth of 42.2%.

The Zacks Consensus Estimate is currently pegged at $2.12 per share, up 0.5% over the past 30 days. Moreover, the figure indicates 44.2% growth from the year-ago quarter’s reported figure.

Further, total revenues are anticipated to be $6.33 billion, up 20.6% year over year. The consensus mark for third-quarter revenues is currently pegged at $6.38 billion, suggesting 21.7% growth from the figure reported in the year-earlier quarter.

Coronavirus Outbreak Likely to Aid Subscriber Growth:

Increased consumption of media content on the Internet as more and more people were compelled to stay at home due to coronavirus-induced social distancing and lockdowns is expected to have benefited Netflix’s third-quarter top line. The company’s solid content portfolio is also expected to have aided it in gaining new subscribers.

Netflix is ahead in the streaming race despite increased competition from the launch of new services like Disney+ from Disney, HBO Max, Peacock, and Apple TV+ from Apple, as well as existing services like Amazon prime video.

Courtesy of its diversified content portfolio, which is attributable to Netflix’s heavy investments in production and distribution of localized, foreign-language content and an expanding international footprint, the company is expected to have hugely benefited from this upswing.

The Zacks Consensus Estimate for paid total streaming net membership addition is pegged at 3.10 million, down from 10.09 million added in the previous quarter.

The consensus mark for Asia Pacific (APAC) revenues are pegged at $623 million, indicating 9.5% growth from the figure reported in the previous quarter.

Europe, Middle East & Africa (EMEA) revenues are pegged at $1.97 billion, suggesting 4.1% growth from the figure reported in the previous quarter.

Moreover, the consensus mark for the United States and Canada (UCAN) revenues are $2.91 billion, indicating 2.5% growth from the figure reported in the previous quarter.

Further, the Zacks Consensus Estimate for Latin America (LATAM) is pegged at $833 million, suggesting a 6.1% growth from the figure reported in the previous quarter.

if anything can compare to the market-moving power of Netflix’s reported subscriber additions, it would be the guidance target for the same metric in the upcoming holiday quarter. Netflix is putting a bow on a very unusual year this time, with unique challenges balancing out against an equally unusual set of growth-boosting benefits.

Netflix is not afraid of making some changes to its business model, as seen in the sudden shift from DVD mailers to digital-streaming services nine years ago or the more recent decision to end 30-day trial periods for new subscribers. What else is Netflix changing up in preparation for the holidays, and how will these changes fit into the company’s long-term business plan?

To put Netflix’s subscriber addition targets for the fourth quarter into perspective, the company added 8.8 million new accounts in the year-ago period.


  • Netflix is scheduled to announce Q3 earnings results on Tuesday, October 20th, after market close.
  • The consensus EPS Estimate is $2.14 (+45.6% Y/Y) and the consensus Revenue Estimate is $6.38B (+21.5% Y/Y).
  • Analysts expect Netflix’s operating income of $1.29B and streaming paid net adds of 3.262M for the quarter.
  • Over the last 2 years, Netflix has beaten EPS estimates 75% of the time and has beaten revenue estimates 75% of the time.
  • Over the last 3 months, EPS estimates have seen 21 upward revisions and 6 downward. Revenue estimates have seen 17 upward revisions and 13 downward.

Netflix LONG (Buy)

ENTER AT: 537.81

T.P_1: 556.07

T.P_2: 577.45

T.P_3: 615.34

T.P_4: 670.00

T.P_5: 770.06

S.L: 467.90

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