Was poured cold water before the score! Why is Netflix being sung by Wall Street ahead of schedule?

Source: Zhitong Finance

When Netflix (NFLX.US)$ reports earnings after the U.S. stock market closes on Tuesday (early Wednesday morning Beijing time), the market will not only focus on the company’s number of new users in the first quarter of 2022, but also on the number of new users The company gave new user guidance for the second quarter.

Analysts pointed out that Netflix’s upcoming second-quarter guidance will have at least as much impact on investors as its first-quarter results, the most important of which is the addition of paying subscribers.

Bank of America analyst Nat Schindler said the positive impact of the return of popular shows like the fourth season of Netflix’s “Stranger Things” and the first-quarter launch of new shows like “Bridgeton” will be a source of Key factor in second-quarter guidance.

In addition, the analyst pointed out that analysts’ consensus forecast is that Netflix will add 2.6 million new paid subscribers in the second quarter, which not only exceeds Netflix’s expectations for the first quarter, but also exceeds the company’s 1.54 million new additions in the second quarter of 2021. . Still, the analyst said he was “a little concerned” by Wall Street’s high hopes for Netflix to add subscribers in a seasonally weak second quarter.

Coincidentally, last week, Morgan Stanley analyst Benjamin Swinburne also pointed out the risk of Netflix’s recent increase in new users, and therefore lowered the target price of the stock from $450 to $425.

Wall Street expects Netflix’s Q1 revenue to be $7.93 billion, a year-on-year increase of 10.7%; earnings per share were $2.92, a year-on-year decrease of 22.7%. Previously, Netflix said in its fourth-quarter 2021 financial report that it expected 2.5 million new paying users in Q1 2022. This guidance given by Netflix is ​​far lower than the market’s expected increase of 6.26 million, and it is also lower than the increase of 4 million in the same period last year.

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