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Will Coronavirus-Led User Growth Aid Netflix (NFLX) Q1 Earnings?
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Netflix (NFLX - Free Report) is set to report first-quarter 2020 results on Apr 21.
The company’s subscriber growth is expected to have been robust in the to-be-reported quarter due to the coronavirus-induced safe distancing and lockdown norms that drove consumption of media content on the Internet.
Netflix’s strong slate of releases including returning seasons of Sex Education, Altered Carbon, Narcos: Mexico, the Spanish series Elite and Korean historical zombie thriller Kingdom as well as original series like Messiah is a major driving force.
Further, the launch of low-priced mobile plans in India, Indonesia, Malaysia, Philippines and Thailand is expected to have spiked Netflix’s subscriber strength in Asia-Pacific (APAC).
Notably, APAC revenues surged 51% year over year to $418.1 million in fourth-quarter 2019. Moreover, management stated that the mobile plans led to increased user retention in these regions.
The Zacks Consensus Estimate for International streaming revenues is pegged at $3.09 billion, indicating 30.6% growth from the figure reported in the year-ago quarter. Moreover, the consensus mark for Domestic streaming revenues stands at $2.51 billion, suggesting 21.1% growth from the figure reported in the year-ago quarter. Click here to know how the company’s overall Q1 performance is expected to be.
Investors expect first-quarter earnings call to provide a sneak peek into Netflix’s content plans and spending strategy.
Courtesy of its diversified content portfolio, which is attributable to heavy investments in the production and distribution of localized, foreign-language content and an expanding international footprint, Netflix has been dominating the streaming space despite the launch of new services like Disney+ from Disney (DIS - Free Report) and Apple TV+ from Apple (AAPL - Free Report) as well as the existing services like Amazon (AMZN - Free Report) prime video.
Upcoming rollouts like Comcast’s Peacock and AT&T’s HBO Max are expected to intensify competition.
Additionally, Netflix has been spending aggressively to build its original show portfolio. Moreover, in order to sustain its dominant position, this Zacks Rank #2 (Buy) company is spending heavily on marketing activities. This, in turn, is expected to have negatively impacted free cash flow and profitability in the to-be-reported quarter.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Notably, Netflix reported free cash outflow of $1.67 billion in the fourth quarter of 2019 compared with $551 million in the previous quarter.
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Image: Bigstock
Will Coronavirus-Led User Growth Aid Netflix (NFLX) Q1 Earnings?
Netflix (NFLX - Free Report) is set to report first-quarter 2020 results on Apr 21.
The company’s subscriber growth is expected to have been robust in the to-be-reported quarter due to the coronavirus-induced safe distancing and lockdown norms that drove consumption of media content on the Internet.
Netflix’s strong slate of releases including returning seasons of Sex Education, Altered Carbon, Narcos: Mexico, the Spanish series Elite and Korean historical zombie thriller Kingdom as well as original series like Messiah is a major driving force.
Further, the launch of low-priced mobile plans in India, Indonesia, Malaysia, Philippines and Thailand is expected to have spiked Netflix’s subscriber strength in Asia-Pacific (APAC).
Notably, APAC revenues surged 51% year over year to $418.1 million in fourth-quarter 2019. Moreover, management stated that the mobile plans led to increased user retention in these regions.
Netflix, Inc. Revenue (TTM)
Netflix, Inc. revenue-ttm | Netflix, Inc. Quote
The Zacks Consensus Estimate for International streaming revenues is pegged at $3.09 billion, indicating 30.6% growth from the figure reported in the year-ago quarter. Moreover, the consensus mark for Domestic streaming revenues stands at $2.51 billion, suggesting 21.1% growth from the figure reported in the year-ago quarter.
Click here to know how the company’s overall Q1 performance is expected to be.
Aggressive Spending Amid Competition Hurts Free Cash Flow
Investors expect first-quarter earnings call to provide a sneak peek into Netflix’s content plans and spending strategy.
Courtesy of its diversified content portfolio, which is attributable to heavy investments in the production and distribution of localized, foreign-language content and an expanding international footprint, Netflix has been dominating the streaming space despite the launch of new services like Disney+ from Disney (DIS - Free Report) and Apple TV+ from Apple (AAPL - Free Report) as well as the existing services like Amazon (AMZN - Free Report) prime video.
Upcoming rollouts like Comcast’s Peacock and AT&T’s HBO Max are expected to intensify competition.
Additionally, Netflix has been spending aggressively to build its original show portfolio. Moreover, in order to sustain its dominant position, this Zacks Rank #2 (Buy) company is spending heavily on marketing activities. This, in turn, is expected to have negatively impacted free cash flow and profitability in the to-be-reported quarter.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Notably, Netflix reported free cash outflow of $1.67 billion in the fourth quarter of 2019 compared with $551 million in the previous quarter.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
See these 7 breakthrough stocks now>>