Netflix — which reported in July it had a total of 220.67 million subscribers, down about 970,000 from the first quarter — has forecast it will add a million subscribers when it discloses its Q3 earnings on Oct. 18. Year to date, Netflix stock is down about 60 percent from the first day of trading this year and sits at $230.00 a share.
Going into earnings season, other analysts have also highlighted an increased ad tier focus among investors. After Tuesday’s market close, Netflix will hit its net subscriber addition forecast of 1 million, in line with management guidance, “reflecting macro and near-term challenges,” Cowen analyst John Blackledge predicted in an Oct.
J.P. Morgan analyst Doug Anmuth, in an Oct. 10 report, maintained his “neutral” rating and $240 price target on Netflix shares. “Given Netflix’s recently muted sub growth, advertising is critical to re-accelerating revenue, expanding Netflix’s Serviceable Available Market and driving greater profitability,” Anmuth explained. “The Netflix narrative has shifted from slow/no sub growth on the current business to advertising and paid sharing.
However, not everyone on Wall Street is as optimistic about the upside from the ad tier and password sharing. Pivotal Research Group analyst Jeff Wlodarczak in an Oct. 11 report reiterated his “sell” rating and $175 price target.