Analysts Optimistic On Netflix Heading Into Q4 Earnings

Netflix, Inc. (NASDAQ: NFLX) is scheduled to report Q4 earnings after the market close Tuesday. The average analyst estimate for revenue is $1.48 billion with EPS of $0.45.

Topeka Capital Markets noted that “all eyes will really be on the international sub result, which by our calculations, should come in at 2.17mm. That estimate, representing 24.7 percent growth YOY, is a combination of strong traction in the UK and Canada, continued uplift in Latin America, but also initial sub adds out of the new markets launched at the beginning of last quarter, which are France, Luxembourg, Belgium, Switzerland, Germany, and Austria.”

Topeka analyst David W. Miller estimated Q4 revenue at $1.484 billion and EPS at $0.48, $0.02 above consensus. The firm rated Netflix a Buy with a $494 price target.

Stifel analyst Scott Devitt noted that while “international subscribers in 3Q:14 and guidance for 4Q:14 came in below consensus, we believe this may have been a case of investors getting ahead of themselves. While 4Q may continue to be bumpy, we believe 2015 will see resumed growth from launches in Western Europe in mid-September 2014.”

Devitt added that the “company's 4Q guidance calls for a third consecutive quarter of lower domestic net subscriber additions relative to prior year. We believe another miss on subscriber estimates may cause shares to drop another 10-15 percent and will likely heighten investor's perception and discussion of competitive risks.”

Stifel estimated Q4 revenue at $1.5 billion and EPS at $0.43. The firm rated the stock a Buy and maintained a $380 price target.


JP Morgan analyst Doug Anmuth’s subscriber estimates were “in line with the US guide at 1.85M net adds (39.1M subs), but ~90k net adds above on International at 2.24M net adds (18.1M subs). 4Q results should be driven by the continued secular shift away from linear TV and positive seasonality.”

JP Morgan estimated Q4 revenue at $1.489 billion and a below-consensus EPS of $0.39, based on an international contribution loss of $99 million related to European expansion. The firm maintained an Overweight rating and $450 price target.

Heading into the earnings announcement, shares of Netflix were rising and recently traded at $344.91, up 2.37 percent.