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Netflix Q3 Earnings Preview: NFLX Stock Set to Continue Its Fall Amid Streaming TV Competition?

Benjamin Rains

 

Welcome to the latest episode of the Full-Court Finance podcast from Zacks Investment Research where Associate Stock Strategist Ben Rains dives into everything investors need to know about Netflix NFLX stock with the streaming TV firm set to report its Q3 earnings results on October 16. We break down why shares of Netflix have fallen far behind their FAANG peers, what to expect from quarterly subscriber and revenue results, the firm’s streaming competitors, and much more.

Netflix stock has fallen far behind all of the other so-called FAANG stocks—Facebook FB, Apple AAPL, Amazon AMZN, and Google GOOGL—over the last 12 months. Shares of Netflix are down 22% over the 52 weeks and have tumbled 25% since it reported its Q2 results in July. The major drop came after Netflix fell well short of its own second-quarter subscriber estimates. Yet this wasn’t the first time the streaming TV firm came in below its subscriber projections and it has a history of blowing away estimates in the quarter following a miss.  

Netflix management provided strong third-quarter guidance and the firm will likely have to beat that projection in order to see its stock jump. On top of that, NFLX is just a few weeks away from competing in a much more crowded streaming TV landscape, against some of the biggest companies in the world.  

Disney DIS and Apple will both launch streaming offerings, Disney+ and Apple TV+, in November at price points far below Netflix. Plus, HBO T has been at the forefront of premium TV for years and Comcast CMCSA is set to roll out a streaming platform under its NBCUniversal brand.

Along with the competitive landscape, Wall Street might be worried about Netflix’s growing debt load. Nonetheless, our Zacks Consensus Estimates call for its third-quarter revenue to climb higher than it has over the past three quarters. Netflix remains a streaming giant and one of the only pure plays in the market aside from Roku ROKU...

As a reminder, if you feel that we missed something, or if you have any topic suggestions, shoot us an email at podcast@zacks.com. Make sure to check out all of our other audio content at zacks.com/podcasts, and remember to subscribe and leave us a rating wherever you listen to your podcasts.

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The Walt Disney Company (DIS) : Free Stock Analysis Report
 
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
 
Netflix, Inc. (NFLX) : Free Stock Analysis Report
 
Facebook, Inc. (FB) : Free Stock Analysis Report
 
Alphabet Inc. (GOOGL) : Free Stock Analysis Report
 
AT&T Inc. (T) : Free Stock Analysis Report
 
Comcast Corporation (CMCSA) : Free Stock Analysis Report
 
Apple Inc. (AAPL) : Free Stock Analysis Report
 
Roku, Inc. (ROKU) : Free Stock Analysis Report
 
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