Netflix: Wall Street Anticipates a Drop in Subscriber Growth

Netflix (NASDAQ: NFLX) subscriber additions in the fourth quarter are likely to come in below expectations, while Wall Street analysts lower price targets for Netflix stock.

SunTrust analysts lowered price targets on Netflix stock from USD 410 to USD 355, which still indicates an upside of 30%. In pre-market trade on Wednesday Netflix shares dropped nearly 3% to around  USD 260 a share. The stock gained 39% last year but was down 36% from its record high of USD 423.21 set in June.

Netflix stocks lower comparable multiple and rising interest rates are primarily to blame for analysts lowered price targets.

Subscriber growth for the internet entertainment company in domestic and international users is currently predicted to come in below estimates. Fourth quarter U.S. subscriber additions were expected to grow to 1.75 million, now analysts expect 1.43 million to 1.75 million. International subscriber additions were originally predicted to come in at 7.3 million, now estimates are between 5 million to 6.9 million.

Analysts expect new popular programming from Netflix like “Birdbox,” “Bandersnatch,” and “Taylor Swift Reputation Stadium tour” to close the gap in subscriber additions. However impactful growth for the fourth-quarter seems unlikely.

The streaming company is also expecting to replace Chief Financial Officer David Wells. Netflix now plans to appoint Spencer Neumann as the new CFO, with hopes that the change will bring focus to the company’s production finances. Previously Neumann was  CFO of Activision Blizzard. “Spencer is a stellar entertainment executive and we’re thrilled that he will help us provide amazing stories to people all over the world,” said Reed Hastings, Netflix Chief Executive Officer.

Netflix will report its fourth-quarter results in two weeks on January 17.  Bloomberg analysts are expecting adjusted earnings of USD 0.39 a share on revenue of USD 4.21 Billion.

5 Comments
  1. Paul Monica 7 months ago
    Reply

    $NFLX why not keep your current prices where they are and then charge a small PPV for big budget movies in the first month or so. Say 7.99. A family can watch that movie at home, save a bunch of money vs. movie theatre, and $NFLX kills it. Small tweak to their model.

    • Bobby Pettis 7 months ago
      Reply

      #Netflix giving more huge multi-million salary increases for execs, despite low shareholder support on pay last year. This will drive up pay at all companies that use $NFLX as compensation peer. Will be interesting to see who adds. At least one company, $EA, added last year.

    • Harry Persaud 7 months ago
      Reply

      $nflx will be crashed as it’s corporate debt skyrocket!

    • Luke Hatch 6 months ago
      Reply

      $NFLX very typical bullish parabolic move. need a higher high (above previous high) to confirm parabolic move b/o – meaning need 281 to confirm. if can’t power through 281, back down to 250 possible.

  2. Sarah Sanchez 7 months ago
    Reply

    $NFLX all about that $270 mark watch the volume on b/o If comes they hitting the $280c strike might be a fun lotto..

Leave a Comment