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Netflix (NFLX) is expected to release its fourth quarter 2020 results after the closing bell on Tuesday, with investors and analysts focusing on how the video streaming giant continues to respond to the influx of new users drawn to the service at amid the coronavirus pandemic.
Here’s what Wall Street expects from the company, as compiled by Bloomberg, relative to its performance in the same quarter last year.
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Returned: 6.63 billion dollars expected against 5.46 billion dollars in the fourth quarter of 2020
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Earnings per share: $ 1.36 expected vs. $ 1.30 in Q4 2020
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Global Paid Subscriber Additions: 6.03 million expected against 8.76 million in Q4 2020
Netflix’s share price over the past few months has fallen victim to its own success. The company has been one of the biggest beneficiaries of the lockdowns and closures of entertainment venues caused by the pandemic. In the first nine months of 2020, the streaming service added 28.1 million paid subscribers, surpassing the 27.8 million it added in 2019.
But this dramatic increase in the number of new users at the start of the year resulted in slower growth in the third quarter, with the platform adding just 2.2 million new subscribers, compared to 3.3 million analysts expected. .
Netflix’s stock price has fallen 4.5% since the third quarter earnings report compared to the S&P 500, which has gained 9.4% in the same period.
The recent price increases announced by Netflix for US consumers in October will also be the focus of concern in the results. The company now charges $ 14 per month for a standard subscription, down from $ 13 and $ 18 per month for a premium subscription, down from $ 16.
Still, analysts seem optimistic about the company’s future.
“Looking ahead, we remain optimistic about the long-term outlook for media streaming and the respective role of the NFLX in it,” UBS’s Eric Sheridan wrote in a recent analyst note.
See also: Netflix has high bar to cross as 2021 movie blitz takes shape
Piper Sandler analyst Yung Kim offered a similar tone in a recent memo, writing, “As consumers engage in less leisure travel and entertainment outside the home, we think Netflix could continue to benefit from an increase in sub-additions as well as a reduction in the churn rate. “
Of course, Netflix also has a whole host of new competitors to face in the streaming video space. Outside of traditional rivals like Amazon (AMZN) Prime Video and Hulu, the company now has to battle Disney + (DIS), which added 73.7 million subscribers in its first year of availability; as well as HBO Max (T), which now has 57 million subscribers.
To fight back, Netflix will unveil a slew of new content in 2021. The company recently announced that it will release a new movie every week this year, including “Malcom and Marie,” which is already gaining a lot of critical attention, and ” Don’t Look Up, ”which has a star cast including Leonardo DiCaprio, Meryl Streep, Jennifer Lawrence and Jonah Hill.
However, Netflix’s competitors aren’t standing still, either. Disney + will have an attack of new content on offer in 2021, including shows from its biggest franchises: Marvel and “Star Wars.”
It’s a win for us sweet potatoes, but what it means for Netflix remains to be seen.
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