Netflix (NFLX) will report its Q4 2020 revenue after the closing clock on Tuesday, with investors and analysts focused on how the video streaming giant continues to respond to the influx of new users drawn to the service amid the coronavirus pandemic.
This is what Wall Street expects from the firm, as compiled by Bloomberg, compared to its performance in the same quarter last year.
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Income: $ 6.63 billion expected compared to $ 5.46 billion in Q4 2020
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Earnings per share: Expected $ 1.36 vs. $ 1.30 in Q4 2020
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Additions for Global Paid Subscribers: 6.03 million expected compared to 8.76 million in Q4 2020
Netflix’s share price has been the victim of its own success over the past few months. The company was one of the biggest beneficiaries of the closure and closure of reception halls caused by the pandemic. In the first nine months of 2020, the streaming service added an incredible 28.1 million paid subscribers, surpassing the 27.8 million it added in 2019.
But the dramatic increase in new users early in the year meant slower growth in the third quarter, with the platform adding just 2.2 million new subscribers compared to the 3.3 million analysts expected.
Netflix’s share price has fallen 4.5% since the third quarter compared to the S&P 500, which rose 9.4% over the same period.
Recent price increases that Netflix announced for U.S. consumers in October will also be in focus during earnings. The company now charges $ 14 per month for a standard subscription, compared to $ 13, and $ 18 per month for a premium subscription, compared to $ 16.
Analysts still seem excited about the future of the company.
“We look forward to being positive about the long-term outlook for streaming media and the NFLX’s respective role in it,” UBS Eric Sheridan wrote in a recent analysis letter.
See also: Netflix has a high benchmark to clean up as the 2021 movie flash takes shape, with earnings in focus
Yung Kim, analyst at Piper Sandler, gave a similar tone in a recent comment: ‘As consumers do less leisure and out-of-home entertainment, we believe Netflix can continue to benefit from a large amount additional additions as well as softening. ”
Of course, Netflix also has a whole host of new competitions to compete in the video space. In addition to traditional competitors such as Amazon (AMZN) Prime Video and Hulu, the company now has to fight Disney + (DIS), which added 73.7 million subscribers in the first year of availability; as well as HBO Max (T), which now has 57 million subscribers.
To fight back, Netflix will launch a slew of new content in 2021. The company recently announced that it will be releasing a new movie each week this week, including ‘Malcom and Marie’, which is already getting a lot of critics’ attention, and ‘Do Not Look Up’, with a star-studded cast, including Leonardo DiCaprio, Meryl Streep, Jennifer Lawrence and Jonah Hill.
However, Netflix’s competitors are not sitting still either. Disney + will have an onslaught of new content in 2021, including performances of its biggest franchises: Marvel and “Star Wars.”
It’s a win for our bankers, but what it means for Netflix remains to be seen.
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