What to Expect When Netflix Reports After the Close

By Chris Lange Updated Jan 11, 8:58PM EST · Published Jul 16, 9:15AM EDT

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Netflix Inc. (NASDAQ: NFLX) is scheduled to release its second-quarter financial results after the markets close on Monday. The consensus estimates are $0.79 in earnings per share (EPS) and $3.94 billion in revenue. The same period of last year reportedly had EPS of $0.15 and $2.79 billion in revenue.

Netflix’s market cap is $172 billion at about $396 a share. Several analysts believe it will go much higher. The regular knock on the stock’s value is not the rise in Netflix subscriber count. The criticism is that it is in a war with studios and other tech companies for a lead in original programming.

The company says its commitment to programming is above $10 billion for the next three years. Its revenue in its most recently reported quarter was $3.7 billion, up from $2.6 billion in the year before. Its forecast for revenue in the current quarter was $3.9 billion.

Despite this rise in revenue, Netflix margins are tiny. It had net income of $290 million in its latest quarter, compared to $178 million in the year-ago period. The idea that a company that may make as little as $1 billion this year is worth $200 billion is considered absurd in many circles.

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In fact, a few analysts ahead of this report have backed off their Buy ratings, and there are even a few with Sell calls. Prior to the release, a few analysts weighed in on Netflix:

Buckingham Research has an Underperform rating.
SunTrust Banks has a Hold rating with a $415 price target.
Canaccord Genuity has a Buy rating and a $500 price target.
Goldman Sachs has a Buy rating with a $490 target price.
Morgan Stanley has a Buy rating and a $480 target price.
JPMorgan has a Buy rating with a $385 price target.
Wedbush has a Sell rating with a $125 price target.

So far in 2018, Netflix has absolutely outperformed the broad markets, with its stock up about 106% in this time. Over the past 52 weeks, the stock is actually up 150%.

Shares of Netflix were last seen trading at $395.80, with a consensus analyst price target of $382.60 and a 52-week range of $160.02 to $423.21.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.