NFLX - Netflix subscriber growth price hike in focus during Q3 results
2023-10-17 14:37:25 ET
Netflix ( NASDAQ: NFLX ) investors will focus on subscriber growth following its crackdown on password-sharing and any commentary related to price hikes when the streaming giant reports its third quarter results on Wednesday.
Netflix has been the only big streaming company that did not raise its prices over the past year and instead emphasized on boosting its revenue with a crackdown on password sharing that began in March.
The company is expected to add over 6 million subscribers for the third quarter.
"Price rises are inevitable and we can expect this most likely on an annual basis; akin to traditional pay TV and other services," said Paolo Pescatore, an analyst at PP Foresight.
A media report in October said that the company was looking to raise its prices after the end of the strike by actors and writers that brought Hollywood to a standstill.
After nearly five months, Hollywood writers ended their strike and returned to work in September after the governing boards of their unions approved a new contract with major studios.
"It will be interesting to see licensing costs given the return of studios syndicating some shows. Depending on the arrangements this might eat further into Netflix's margins," added Pescatore.
With top-rated shows such as Virgin River and Sweet Magnolias dropping new seasons, Wall Street expects the company to show a 7.7% rise in third quarter revenue to $8.54 billion.
The company is constantly looking for new avenues to boost its revenue through its new ad-supported tier and further push into videogaming. Earlier on Tuesday, the California-based company said it would enter into live sports with its plan to stream The Netflix Cup golf event live on Nov. 14.
Earnings per share (EPS) is expected to be $3.48 for the quarter, marking a jump of more than 12%.
Over the past year, Netflix has beaten EPS estimates 100% of the time and has beaten revenue estimates 50% of the time.
Seeking Alpha analysts and Seeking Alpha’s Quant rating consider the stock a Hold and Wall Street analysts rated the stock a Buy. The stock gained more than 20% so far this year.
Over the last three months, EPS estimates have seen 23 upward revisions, compared to three downward revisions, while revenue estimates have seen seven upward revisions versus 19 downward moves.
More on Netflix
- Netflix: Expecting A Strong Third Quarter, But The Stock Is Not A Buy Yet
- Netflix: A Lot Of Value Is In The Cards
- Netflix: Headwinds, Just How Big?
- 'Netflix Cup' golf event sets up streamer's entry into live sports
- Hollywood strike: Talks between studios, actors break down
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Netflix subscriber growth, price hike in focus during Q3 results