Netflix’s (NFLX - Free Report) robust library of original content is expected to boost subscriber base in the first quarter of 2018, which is scheduled to be reported on Apr 16.
The company has been benefiting from increasing subscriber addition in the domestic as well as the international market on the back of its expanding content portfolio.
Last quarter, Netflix added 8.3 million subscribers (highest in history), much more than the expected 6.3 million.
For the first quarter, management expects to add 1.45 million subscribers in the domestic streaming segment and 4.90 million subscribers in the international segment. Paid memberships are expected to be 54.71 million for the domestic segment and 63.78 million for the international.
Click here to know how the company’s overall Q1 performance is likely to be.
Portfolio Strength to Boost Expansion
Netflix had a slew of releases in the quarter not only in English but also in other foreign languages, which will help it attract and retain subscribers, fueling top-line growth in turn.
The release of a new sci-fi series titled Altered Carbon and a six-episode chat show, My Next Guest Needs No Introduction with David Letterman, featuring influential personalities like Barack Obama, garnered accolades all over.
This apart, the company brought forward new seasons of the existing original series and expanded the original movies offering. The company’s Oscar win for the documentary Icarus in the quarter is also estimated to boost popularity.
International subscriber growth, playing a major role in driving Netflix’s revenues, is anticipated to get a further boost, given the company’s focus on developing original regional content portfolio.
For the first quarter, the Zacks Consensus Estimate for the total number of international subscribers is 67.8 million, up 41.4% from the number reported a year ago while domestic subscribers are projected to increase by 10.4% to 56.2 million.
Netflix’s content strength is evident from the fact that despite a subscription price increase in the United States and other countries, subscriber addition remained unaffected in the preceding quarter.
The Zacks Consensus Estimate for paid international subscribers in the first quarter is predicted to surge by 41.8% to nearly 63.8 million from the year-ago quarter’s tally while paid domestic subscribers are forecast at a 10.7% increase to more than 54 million.
Zacks Rank & Other Key Picks
Netflix carries a Zacks Rank #2 (Buy). Some other top-ranked stocks worth considering from the same space are Paycom Software (PAYC - Free Report) , Western Digital (WDC - Free Report) and Applied Materials (AMAT - Free Report) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
While Paycom is set to release earnings on May 1, Western Digital will announce the same on Apr 26 and Applied Materials on May 17.
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