Netflix Q1 Earnings Preview: Subscriber Growth, Potential Price Increases, Ad Tiered Programs, and More Wall Street Expectations

Streaming Media GiantNetflix, Inc.(NASDAQ:NFLX) will release its first quarter financial results on Thursday, April 18, 2024 after the close of business.

Earnings estimates, analysts' views and key concerns are provided below.

Profit ExpectationAccording to Benzinga Pro, analysts expect Netflix to report first-quarter revenue of $9.275 billion.

The streaming media company reported revenue of $8.162 billion in the first quarter of last year. The company has exceeded market expectations in two of the last four quarters, including the recently announced fourth quarter.

Netflix said in its Q4 earnings report that it expects Q1 revenue to be $9.24 billion, up 13.21 TP3T year-over-year.

Analysts expect the company to report first-quarter earnings of $4.52 per share, up from $2.88 in the first quarter last year. The company has exceeded analysts' EPS estimates in three of the last four quarters.

Netflix is expected to report first-quarter earnings of $4.49 per share.

The streaming company added 13.12 million net subscribers in the fourth quarter, bringing the total number of subscribers to 260.28 million, and Netflix's guidance states that net subscriber additions will continue to decline but should be higher than the 1.8 million net subscriber additions reported in the first quarter of 2023.

What analysts say:Macquarie Analysts Tim Nollen) thinks Netflix's ad-supported programs and pay-for-share crackdown could lead to more upside.

The analyst, who has an Outperform rating on Netflix's stock, said that comparing his initial estimates of ad tiers and pay-to-play sharing to where the company is right now, Netflix could have more upside.

"Netflix's crackdown on password sharing after the introduction of ad tiers helped drive nearly 30 million new subscribers in FY23," Nollen said.

The analyst, who raised his price target on Netflix to $685 from $595, said Netflix initially shared passwords with about 100 million subscribers, which could show even more room for subscriber growth in 2024.

Nolen also said that investors should keep an eye on Netflix's average revenue per member, with monetization of its ad tier likely to increase and prices for subscribers likely to rise.

"Netflix's mid-tier ad-free price of $15.49 in the U.S. is actually now behind Hulu and Max, and its base of ad-tier subscribers continues to grow, which provides more volume and pricing power in an ad market that's generally chugging along."

Nolen noted that since January 2022, Netflix has not raised the price of the standard plan.

"We think a price increase may be imminent."

According to Piper Sandler analystsMatt Farrell) A recent report on Netflix's first-quarter subscriber growth may have been overestimated.

The analyst, who has a "Neutral" rating, said that after the impressive fourth-quarter net additions, the perception of Netflix has gone from "better than expected" in the third quarter to now being "how much growth".

"We believe investors are looking for real growth in the first quarter with a net increase of 4.5 million subscribers," Farrell said.

See more earnings about NFLX

This analyst raised their price target on Netflix shares from $550 to $600.

A key question, Farrell said, is where Netflix currently stands on the pay-per-share spectrum, which some bulls believe will lead to more growth.

"Netflix has proven itself to be a worthy leader in the streaming space, and we'd like to appear to be back in order to get more constructive feedback."

Below are recent ratings and price targets for Netflix from other analysts.

Guggenheim:Buy rating, target price raised from $600 to $700

Morgan Stanley (financial services company)Hold, target price raised from $600 to $700

Barclays BankEqual weight rating, target price raised to $550 from $475

TD Cowen: Buy rating, target price raised to $725 from $600

JP Morgan Chase (bank)Hold, target price raised to $650 from $610

WedbushOutperform rating, price target raised to $725 from $615.

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Key Concerns: Net subscriber numbers are likely to be the biggest focus for investors and analysts, and subscriber price increases could be another big headline in the first-quarter results.

Another thing to watch might be the discussion about the company's sports ambitions, as Netflix has already announced its plans for sports-related content, but is leaning more toward one-off events and sports documentaries rather than aggressively bidding for full seasons of live sports.

The company has organized a live tennis tournament in March and will also be organizing aDr. Kerosene Tyson. respond in singingKit Kit Paul.The live streaming of the boxing event. The fight will be held on July 20 and could be one of the biggest sporting events in the company's history.

Netflix is known to bash other media companies, and in the fourth quarter emphasized that it is not interested in acquiring linear assets or picking up slack from other media companies. A discussion of market share and competition can provide more insight into how Netflix has come to dominate the industry.

NFLX Price Trend:On Tuesday, Netflix shares rose 1.89% to $618.47 in a 52-week trading range of $315.62 to $639.

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This article, Netflix Q1 Earnings Preview: Subscriber Growth, Potential Price Increases, Ad Tiered Programs, and More on Wall Street Expectations, originally appeared on Benzinga.com.

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