Welcome to the latest episode of the Full-Court Finance podcast from Zacks Investment Research where Associate Stock Strategist Ben Rains dives into everything investors need to know about Netflix (NFLX - Free Report) stock with the streaming TV firm set to report its Q3 earnings results on October 16. We break down why shares of Netflix have fallen far behind their FAANG peers, what to expect from quarterly subscriber and revenue results, the firm’s streaming competitors, and much more.
Netflix stock has fallen far behind all of the other so-called FAANG stocks—Facebook (FB - Free Report) , Apple (AAPL - Free Report) , Amazon (AMZN - Free Report) , and Google (GOOGL - Free Report) —over the last 12 months. Shares of Netflix are down 22% over the 52 weeks and have tumbled 25% since it reported its Q2 results in July. The major drop came after Netflix fell well short of its own second-quarter subscriber estimates. Yet this wasn’t the first time the streaming TV firm came in below its subscriber projections and it has a history of blowing away estimates in the quarter following a miss.
Netflix management provided strong third-quarter guidance and the firm will likely have to beat that projection in order to see its stock jump. On top of that, NFLX is just a few weeks away from competing in a much more crowded streaming TV landscape, against some of the biggest companies in the world.
Disney (DIS - Free Report) and Apple will both launch streaming offerings, Disney+ and Apple TV+, in November at price points far below Netflix. Plus, HBO (T - Free Report) has been at the forefront of premium TV for years and Comcast (CMCSA - Free Report) is set to roll out a streaming platform under its NBCUniversal brand.
Along with the competitive landscape, Wall Street might be worried about Netflix’s growing debt load. Nonetheless, our Zacks Consensus Estimates call for its third-quarter revenue to climb higher than it has over the past three quarters. Netflix remains a streaming giant and one of the only pure plays in the market aside from Roku (ROKU - Free Report) ...
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