Others aren't as optimistic, and instead view the streaming giant's shares as already pricing in a strong earnings beat.

After adding 26 million new customers in all of 2019, Netflix added 28 million in the first half of 2020 alone. The company had guided to net additions of 2.5 million while reporting its earnings for Q2 2020. For latest tech news in your inbox, once a day! All rights reserved.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article.

It’s tempting, no doubt, to take some shares of Netflix off the table after its multi-year run-up.

Okay, I’m exaggerating a bit there. Netflix said it still expects to launch more originals in each quarter of 2021 than this year, even with COVID production suspensions. Copyright © After a deluge of activity in the first half of 2020, Netflix is now facing what is likely its slowest quarterly growth since Q2 2018. On …

It’s a wellspring of revenues that must be replenished constantly. Could there be a reason to hold one’s shares despite the uncertainty surrounding the imminent fiscal data release? Similarly, Goldman Sachs analyst Heath Terry increased his forecast to 6 million quarterly net new subscribers. Netflix missed analyst expectations on earnings per share but beat revenue expectations. As Morgan Stanley analyst Benjamin Swinburne put it, “We continue to see short- and long-term benefits to Netflix growth and earnings power due to the changes brought on by the pandemic.”. As productions restart, the company projects FCF in the fourth quarter to be slightly negative, with free cash flow for the full-year 2020 to be approximately $2 billion (up from its prior expectation of break-even to positive). So, as long as the bulls are in control, it’s probably not a great idea to bet against Netflix. David Moadel has provided compelling content – and crossed the occasional line – on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. There was a wobbly period in 2018 and 2019, but loyal investors who didn’t get shaken out were rewarded handsomely. The company netted 2.2 million subscribers in the third quarter of 2020 — below Wall Street’s expectations and under the Netflix’s own previous forecast. For 2021, Netflix is forecasting free cash flow to be between -$1 billion and break-even.

Revenue climbed 22.5% to $6.44 billion from $5.24 billion. Anyone who had the foresight to buy shares of Netflix stock a few years ago is surely in the green today. But as the company itself warned while riding this unsustainable wave, all good things must come to an end. We want to hear from you. Interestingly enough, the company itself could be Netflix’s most prominent bear going into earnings. (This story is for CNBC PRO subscribers only.). We get it: you like to have control of your own internet experience. That might sound like a lot, but a comparison to past quarters should provide some perspective.


Here's what analysts said about Netflix's earnings report: Got a confidential news tip? We are a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com.