Netflix (NFLX) will report third quarter results after the bell.
Netflix has guided for third quarter EPS of $1.04 (vs. $0.89 last year) with an operating margin of 15.9% (+390 basis points yr/yr) and revenue up 31% to $5.25 bln.
Netflix guided for 7 mln global paid net subscriber additions (6.2M international and 800,000 US market) vs. a 6.07M increase in the third quarter of 2018 (+22% yr/yr to 158.6M).
Analysts expect the company to guide for a +9.5M increase in subs for the fourth quarter versus an 8.8M increase in the fourth quarter last year.
Last quarter subs fell by 130,000 versus guidance for a 300,00 increase in the U.S. The U.S. market is saturated and accounts for most of the company's earnings, but will see a ton of competition hit the market over the next six months. Subs grew by 2.83 mln internationally versus 4.7 mln guidance.
it will be interesting to see how competition affects this stock and company tonight after the bell. I will be looking to see specifically if they mention Youtube as a real competitor again.
TECHS:
Netflix has a ~$124 bln market cap and trades at ~34x forward EBITDA estimates, ~60x EPS estimates and ~6x revenue.
The options market implies a ~11% move in the stock by Friday.
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